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CEE MARKETS-Zloty eases ahead of CPI data, Poland leads bank stock slide
June 12, 2017 / 9:54 AM / 3 months ago

CEE MARKETS-Zloty eases ahead of CPI data, Poland leads bank stock slide

    * Zloty eases, CPI figures may underpin central bank doves
    * Polish markets will be closed on Thursday
    * Warsaw bank stock index shed 2 pct, leading fall of CEE
shares

    By Sandor Peto and Bartosz Chmielewski
    BUDAPEST/WARSAW, June 12 (Reuters) - Warsaw bank shares led
Central European equities lower on Monday as they tracked losses
in Western Europe and Asia following Friday's technology
sell-off on Wall Street.
    Investors were also cautious before Wednesday's Federal
Reserve meeting which is expected to raise interest rates and
possibly give signals about the pace of future hikes that could
influence appetite for emerging markets assets.
    Poland's zloty eased a quarter of a percent to
4.1932 against the euro by 0857 GMT, while other Central
European currencies were steady.
    "Some investors may be also closing their positions ahead of
the expected Fed hike and lower zloty liquidity due to Thursday
(Corpus Christi) national holiday," one Warsaw-based dealer
said.
    Some investors expect the breakdown of Polish May inflation
data, due at 1200 GMT, to show lower inflation pressure than
earlier expected.
    That would underpin forecasts from Polish central bank
governor Adam Glapinski that the bank is unlikely to start to
lift its record low interest rates until the end of next year.

    Another rate setter, Lukasz Hardt, warned last month that a
tightening of the labour market could lift wage-side inflation
pressure as the European Union allows visa-free travel to
Ukrainians.
    From this week, Ukrainians can travel to EU member states
without visas, raising the risk that some of the hundreds of
thousand of Ukrainians who work in Poland may move further to
the West, causing a labour shortage in Poland.
    "As the risks of the inflation rate overshooting the (2
percent) target in the medium term are relatively low, the MPC
(central bank) is likely to sustain its relatively dovish
rhetoric, especially as demand pressure has been limited despite
labor market tightening," Erste analysts said in a note.
    "At this point, we see a possibility of a rate hike only in
(the second half of 2018)," they added.
    Warsaw's bluechip stock index fell 1.2 percent, with
the sub-index of bank shares shedding 2 percent, while
Western European bank shares also eased, with the STOXX Europe
600 banks index dropping 1.2 percent.
    Polish banks PKO BP and Pekao shed 1.9-2
percent. Other bank stocks in the region eased less, with
Hungary's OTP dropping 0.7 percent, while Budapest's
main index fell half a percent.
    
                CEE MARKETS  SNAPSH   AT  1057 CET         
                             OT                      
                             CURRENCIES                    
                             Latest  Previo  Daily   Change
                                     us              
                             bid     close   change  in
                                                     2017
 Czech crown                 26.195  26.202   +0.03   3.10%
                                  0       5       %  
 Hungary                     307.70  307.71   +0.00   0.36%
 forint                          00      50       %  
 Polish zloty                4.1932  4.1830  -0.24%   5.02%
 Romanian leu                4.5640  4.5615  -0.05%  -0.64%
 Croatian kuna               7.4080  7.4091   +0.01   1.99%
                                                  %  
 Serbian dinar               122.31  122.36   +0.04   0.85%
                                 00      00       %  
 Note: daily    calculated   previo  close   1800          
 change         from         us      at      CET     
                             STOCKS                        
                             Latest  Previo  Daily   Change
                                     us              
                                     close   change  in
                                                     2017
 Prague                      1006.3  1008.1  -0.18%   +9.20
                                  7       6               %
 Budapest                    35223.  35411.  -0.53%   +10.0
                                 30      01              6%
 Warsaw                      2303.9  2330.7  -1.15%   +18.2
                                  4       2              8%
 Bucharest                   8473.0  8515.4  -0.50%   +19.5
                                  7       0              9%
 Ljubljana                   788.20  792.17  -0.50%   +9.84
                                                          %
 Zagreb                      1840.0  1839.8   +0.01  -7.76%
                                  6       1       %  
 Belgrade                    716.65  718.73  -0.29%  -0.10%
 Sofia                       681.10  675.83   +0.78   +16.1
                                                  %      4%
                             BONDS                         
                             Yield   Yield   Spread  Daily
                             (bid)   change  vs      change
                                             Bund    in
 Czech                                               spread
 Republic                                            
   2-year                    -0.124   0.062   +061b   +7bps
                                                 ps  
   5-year                    -0.109   0.019   +035b   +3bps
                                                 ps  
   10-year                    0.785    0.01   +054b   +3bps
                                                 ps  
 Poland                                                    
   2-year                     1.891   0.003   +262b   +1bps
                                                 ps  
   5-year                     2.585   0.003   +305b   +2bps
                                                 ps  
   10-year                    3.124  -0.044   +288b   -3bps
                                                 ps  
                FORWARD      RATE    AGREEMENT             
                             3x6     6x9     9x12    3M
                                                     interb
                                                     ank
 Czech Rep              <PR    0.35    0.43    0.52       0
                IBOR=>                               
 Hungary                <BU    0.19    0.23    0.29       0
                BOR=>                                
 Poland                 <WI   1.754   1.769    1.82    1.73
                BOR=>                                
 Note: FRA      are for ask                                
 quotes         prices                               
 **********************************************************
 ****
 
 (Additional reporting by Radu Marinas in Bucharest; Editing by
Andrew Heavens)
  
 
 

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