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CEE MARKETS-Currencies ease ahead of Fed, dinar firms as Serbian central bank meets
March 14, 2017 / 10:22 AM / 9 months ago

CEE MARKETS-Currencies ease ahead of Fed, dinar firms as Serbian central bank meets

    * Forint, leu, zloty near multi-month highs ahead of Fed
    * Regional assets rangebound, trading interest low
    * Serbian central bank seen holding fire, dinar firms
    * Ley may be near central bank's tolerance level -analysts

    By Sandor Peto and Radu-Sorin Marinas
    BUDAPEST/BUCHAREST, March 14 (Reuters) - Central European
currencies eased slightly on Tuesday ahead of an expected U.S.
Federal Reserve interest rate hike this week, which might make
emerging Europe's yields relatively unattractive.
    The dinar bucked the trend ahead of a meeting of
the Serbian central bank where it is expected to keep the
region's highest central bank interest rates on hold.

    The currency firmed 0.1 percent against the euro to 123.8 by
0930 GMT.
    The forint and the zloty eased 0.1
percent from the previous session, even though they were off
their respective 3-month and 7-week lows, touched on Monday.
    On top of the expected Fed rate hike, a hawkish tone in
comments from the European Central Bank's meeting last week also
weighed on regional currencies.
    Central banks in the European Union's eastern members have
not turned hawkish despite a fast rebound in inflation
regionally in the last few months.
    After a rollercoaster in the past weeks, markets were calm
on Tuesday, with stocks and government bonds also hardly moving.
    "We see no trading interest (in the region)," one
Budapest-based currency dealer said, noting that the forint
might stay near current weaker trading ranges after the likely
Fed hike. 
    The Fed's comments about the U.S. interest rate trajectory
could reignite price movements, one Hungarian fixed income
trader said.
    Romania rejected all bids at a government bond auction on
Monday due to flagging demand and over-high yield expectations.
    The leu eased a touch to 4.553 versus the euro,
off Monday's 9-month lows of 4.5599.
    The government has ample reserves and can wait to raise
debt, while risks remain that it will overshoot its deficit
target and reflation could drive Romanian debt yields higher,
ING analysts said in a note.
    They said that the leu was on the brink of levels where the
central bank have stepped in over recent years to stop it
weakening.
    "We still do not see the euro/leu settling around current
levels, but each day the pair inches north and the central bank
stays away leads us to question our view," they said.
    "We also note that in past years, while the central bank
stepped into the market much earlier to curb the leu weakness,
the pair was, nevertheless, stopped short around the 4.5600
handle," they said.
    
              CEE        SNAPS   AT  1030          
              MARKETS    HOT    CET           
                         CURRENCIES                
                         Lates  Previ  Daily  Chang
                         t      ous           e
                         bid    close  chang  in
                                       e      2017
 Czech crown             27.02  27.02   +0.0  -0.05
                            00     45     2%      %
 Hungary                 312.3  312.0  -0.08  -1.13
 forint                    400    950      %      %
 Polish                  4.335  4.330  -0.11  1.59%
 zloty                       0      1      %  
 Romanian                4.553  4.551  -0.03  -0.40
 leu                         0      7      %      %
 Croatian                7.434  7.428  -0.07  1.63%
 kuna                        0      5      %  
 Serbian                 123.8  123.9   +0.1  -0.36
 dinar                     000    400     1%      %
 Note: daily  calculate  previ  close  1800        
 change       d from     ous    at     CET    
                         STOCK                     
                         S                    
                         Lates  Previ  Daily  Chang
                         t      ous           e
                                close  chang  in
                                       e      2017
 Prague                  978.5  977.9   +0.0   +6.1
                             5      1     7%     8%
 Budapest                32797  32686   +0.3   +2.4
                           .25    .30     4%     8%
 Warsaw                  2242.  2242.  -0.02   +15.
                            11     55      %    10%
 Bucharest               7901.  7890.   +0.1   +11.
                            08     13     4%    52%
 Ljubljana               789.9  793.5  -0.45   +10.
                             4      2      %    08%
 Zagreb                  2229.  2224.   +0.2   +11.
                            46     39     3%    76%
 Belgrade     <.BELEX15  741.9  740.5   +0.1   +3.4
              >              3      4     9%     2%
 Sofia                   617.4  619.4  -0.33   +5.2
                             3      6      %     9%
                         BONDS                     
                         Yield  Yield  Sprea  Daily
                                       d      
                         (bid)  chang  vs     chang
                                e      Bund   e in
 Czech                                        sprea
 Republic                                     d
   2-year     <CZ2YT=RR  -0.66  0.088   +014   +8bp
              >              3           bps      s
   5-year     <CZ5YT=RR  0.079  0.024   +038   +1bp
              >                          bps      s
   10-year    <CZ10YT=R  0.801  0.014   +032   +0bp
              R>                         bps      s
 Poland                                            
   2-year     <PL2YT=RR  2.115  -0.01   +291  -2bps
              >                     2    bps  
   5-year     <PL5YT=RR  3.088  0.029   +339   +1bp
              >                          bps      s
   10-year    <PL10YT=R  3.742  0.028   +326   +2bp
              R>                         bps      s
              FORWARD    RATE   AGREEMENT          
                         3x6    6x9    9x12   3M
                                              inter
                                              bank
 Czech Rep            <   0.31   0.37   0.46      0
              PRIBOR=>                        
 Hungary              <   0.32   0.44   0.64   0.23
              BUBOR=>                         
 Poland               <   1.77   1.79   1.84   1.73
              WIBOR=>                         
 Note: FRA    are for                              
 quotes       ask                             
              prices                          
 **************************************************
 ************
 
 (Editing by Louise Ireland)
  
 
 

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