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CEE MARKETS-Assets fall on Deutsche worry, Hungarians to vote on migrants
September 30, 2016 / 9:16 AM / in a year

CEE MARKETS-Assets fall on Deutsche worry, Hungarians to vote on migrants

* Some currencies, stock indices touch multi-week lows
    * Concern over Deutsche bank, oil retreat drives decline
    * Hungarian referendum on migrant quotas a source of tension
    * Romanian central bank meets, seen keeping rates on hold

    By Sandor Peto
    BUDAPEST, Sept 30 (Reuters) - Central European assets
declined on Friday due to concerns over Deutsche Bank, a fall of
oil prices and a referendum in Hungary about the EU's migrant
quotas due on Sunday.
    Financial and energy sector shares led a fall in equities,
indicating that international factors were the key cause of the
weakness.
    The financial woes of Deutsche Bank have cast a
shadow over the European banking sector. Energy sector stocks
are giving up ground gained before the retreat of crude prices.
    Prague's stock index led regional losses. It fell 1.5
percent by 0830 GMT, touching an 11-day low, driven by 5 percent
fall of Moneta Bank and 2.1 percent decline of Erste
Bank.
    Moneta plunged after GE Capital completed an accelerated
bookbuild offering to sell about a quarter of Moneta's share
capital. 
    The forint and the zloty eased 0.1-0.2
percent against the euro, touching their weakest levels since
mid-September.
    Government bonds in the region continued to ease slowly.
    Hungary's 10-year yield rose by 6 basis points from Thursday
fixing to 2.9 percent.
    Robust demand at a Hungarian bond auction on Thursday
indicates that the country's bonds can post further gains in the
coming weeks even though at the moment global risk aversion is
souring sentiment. Regional political sentiment is also shaky.
    At Sunday's referendum, a strong majority of Hungarian
voters is expected to reject the European Union's migrant
quotas, even though turnout may not be high enough to make the
vote valid.
    Analysts said the outcome of the referendum could strengthen
Prime Minister Viktor Orban's support at home and embolden him
to push even more vocal anti-immigration policies within the
European Union.
    This could fuel tensions between the Visegrad Four - Czechs,
Hungary, Poland and Slovakia - and Germany.
    Poland, Hungary, Slovakia and the Czech Republic speak of
"flexible solidarity" and want to be allowed to offset their
refusal to take in refugees by offering more guards and
equipment to protect EU's external borders. 
    Relations of Brussels and Warsaw have been tense anyway over
the rule of law in Poland. The paper Dziennik Gazeta Prawna
quoted Prime Minister Beata Szydlo as saying that an EU decision
to suspend Poland's retail tax was a political game.
    "Politics is a negative backdrop ... but the main worry in
markets now is Deutsche Bank," one Budapest-based fixed income
trader said.
    In Romania, there have been worries that it may loosen
fiscal policies too much around elections in December.
    The leu eased 0.1 percent versus the euro as the
country's central bank met. Analysts in a Reuters poll expected
the bank to keep its interest rates on hold, and some of them
said that it could lift its interest rates by the middle of
2017.
    "... the overall rhetoric (of the bank after the meeting)
could be interpreted as a touch on the hawkish side and, hence,
overall largely neutral for RON (leu) markets," ING analysts
said in a note.
           CEE      SNAP   AT  1030       
           MARKETS  SHOT  CET         
                    CURRENCIES            
                    Late  Prev  Dail  Chan
                    st    ious  y     ge
                    bid   clos  chan  in
                          e     ge    2016
 Czech     <EURCZK  27.0  27.0   +0.  -0.1
 crown     =>        240   260   01%    0%
 Hungary   <EURHUF  309.  308.  -0.1  1.80
 forint    =>       0800  7600    0%     %
 Polish    <EURPLN  4.31  4.31  -0.1  -1.3
 zloty     =>         71    06    5%    7%
 Romanian  <EURRON  4.45  4.45  -0.0  1.36
 leu       =>         85    55    7%     %
 Croatian  <EURHRK  7.51  7.51   +0.  1.72
 kuna      =>         00    15   02%     %
 Serbian   <EURRSD  123.  123.   +0.  -1.4
 dinar     =>       2000  2700   06%    0%
 Note:     calcula  prev  clos  1800      
 daily     ted      ious  e at  CET   
 change    from                       
                    STOC                  
                    KS                
                    Late  Prev  Dail  Chan
                    st    ious  y     ge
                          clos  chan  in
                          e     ge    2016
 Prague             861.  874.  -1.5  -9.9
                      13    57    4%    5%
 Budapest           2766  2798  -1.1   +15
                    2.01  8.68    7%  .64%
 Warsaw    <.WIG20  1727  1730  -0.1  -7.0
           >         .88   .45    5%    6%
 Buchares           6949  6981  -0.4  -0.7
 t                   .82   .03    5%    8%
 Ljubljan  <.SBITO  735.  742.  -1.0   +5.
 a         P>         02    52    1%   58%
 Zagreb    <.CRBEX  1941  1938   +0.   +14
           >         .24   .72   13%  .89%
 Belgrade  <.BELEX  637.  635.   +0.  -1.0
           15>        50    84   26%    2%
 Sofia     <.SOFIX  507.  510.  -0.4   +10
           >          75    16    7%  .16%
                    BOND                  
                    S                 
                    Yiel  Yiel  Spre  Dail
                    d     d     ad    y
                    (bid  chan  vs    chan
                    )     ge    Bund  ge
                                      in
 Czech                                spre
 Republic                             ad
   2-year  <CZ2YT=  -0.4  0.07   +02   +9b
           RR>        86     2  2bps    ps
   5-year  <CZ5YT=  -0.1  0.01   +04   +4b
           RR>        77     9  2bps    ps
           <CZ10YT  0.26  0.01   +04   +5b
 10-year   =RR>        6     6  1bps    ps
 Poland                                   
   2-year  <PL2YT=  1.76  0.01   +24   +3b
           RR>         2     3  6bps    ps
   5-year  <PL5YT=  2.38  0.02   +29   +4b
           RR>         1     3  8bps    ps
           <PL10YT  2.92  0.03   +30   +6b
 10-year   =RR>        8     3  7bps    ps
           FORWARD  RATE  AGREEMENT       
                    3x6   6x9   9x12  3M
                                      inte
                                      rban
                                      k
 Czech     <CZKFRA  0.28  0.24  0.21     0
 Rep       ><PRIBO                    
           R=>                        
 Hungary   <HUFFRA  0.73  0.72  0.72  0.88
           ><BUBOR                    
           =>                         
 Poland    <PLNFRA  1.71  1.68  1.67  1.71
           ><WIBOR                    
           =>                         
 Note:     are for                        
 FRA       ask                        
 quotes    prices                     
 *****************************************
 *********************
 
 (Additional reporting by Luiza Ilie in Bucharest; Editing by
Alison Williams)

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