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CEE MARKETS-Currencies ease on dollar rally, Romanian loan conversion plan
October 12, 2016 / 2:32 PM / in a year

CEE MARKETS-Currencies ease on dollar rally, Romanian loan conversion plan

* Dollar strength knocks regional currencies
    * Leu eases amid CHF loan conversion cost concerns
    * Hungary debt agency changes date, topic of news conference

 (Recasts with fall of currencies, equities)
    By Sandor Peto and Radu-Sorin Marinas
    BUDAPEST/BUCHAREST, Oct 12 (Reuters) - Central European
currencies eased on Wednesday as a surging dollar triggered a
selloff in emerging markets, with plans by  Romania to convert
Swiss franc mortgages adding pressure on the leu.
    The forint, the zloty and the leu all
fell 0.3 percent against the euro by 1337 GMT.
    "This is the normal correlation: investors buy the dollar
and sell assets in emerging markets," one Budapest-based dealer
said, adding that the Hungarian and the Polish currencies had
been at technical resistance levels.
    Pressure on the region's currencies was lower than in Turkey
or South Africa.
    Regional equities also eased, but less than the half percent
fall in MSCI's emerging equity index.
    "(For Central European currencies) it is much more important
to follow news coming from the German economy or about the ECB,"
KBC said in a note.
    The leu also felt pressure as investors awaited the outcome
of a parliamentary vote to approve a bill to convert Swiss franc
mortgage loans into the local currency at historic rates,
postponed on Tuesday to next week due to the lack of a quorum.
    Such loans were common in Central Europe before a surge in
the value of the franc from 2008 caused a rise in defaults.
    Conversion schemes have caused market jitters in Croatia,
Hungary and Poland in past years due to their cost to banks.
    Parliamentary committees on Monday proposed easing some of
the conversion burden due to fall on Romanian banks, helping the
leu rebound from 3-month lows. But some of those
proposals were rejected on Tuesday, and the cost to banks may be
higher than anticipated, ING analysts said in a note.
 
    Romanian assets may face further pressure from possible
legislation before elections on Dec. 11, Raiffeisen analysts
said in a note.
    Romania's 10-year government bond yield was flat at 2.99
percent.
    Hungary's short-term yields extended the past days' slow
rise, though the long end of the curve retreated by a few basis
points ahead of an auction on Thursday.
    Hungarian debt agency AKK moved a planned news conference to
Friday from Thursday and changed the topic to "Debt Management
2010-2016" from ""A New Era in Debt Management".    
           CEE      SNAP   AT  1537       
           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  -0.1
 crown     =>        280   230    2%    1%
 Hungary   <EURHUF  306.  305.  -0.2  2.82
 forint    =>       0000  1500    8%     %
 Polish    <EURPLN  4.29  4.28  -0.3  -0.9
 zloty     =>         76    38    2%    2%
 Romanian  <EURRON  4.49  4.48  -0.3  0.51
 leu       =>         60    25    0%     %
 Croatian  <EURHRK  7.51  7.51   +0.  1.72
 kuna      =>         00    05   01%     %
 Serbian   <EURRSD  124.  123.  -0.8  -2.1
 dinar     =>       1000  0600    4%    2%
 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             890.  894.  -0.4  -6.8
                      86    57    1%    5%
 Budapest           2841  2847  -0.2   +18
                    5.95  9.24    2%  .79%
 Warsaw    <.WIG20  1755  1757  -0.0  -5.5
           >         .61   .04    8%    7%
 Buchares           6912  6926  -0.2  -1.3
 t                   .92   .71    0%    0%
 Ljubljan  <.SBITO  727.  731.  -0.5   +4.
 a         P>         62    42    2%   52%
 Zagreb    <.CRBEX  1995  2002  -0.3   +18
           >         .03   .11    5%  .07%
 Belgrade  <.BELEX  634.  634.   +0.  -1.4
           15>        86    66   03%    3%
 Sofia     <.SOFIX  510.  509.   +0.   +10
           >          02    59   08%  .66%
                    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=  -0.6  -0.0  -001  -2bp
           RR>        62    07   bps     s
   5-year  <CZ5YT=  -0.1  -0.0   +03  -4bp
           RR>        28    11  4bps     s
           <CZ10YT  0.33  -0.0   +02  -6bp
 10-year   =RR>        9     2  8bps     s
 Poland                                   
   2-year  <PL2YT=  1.77  -0.0   +24  -2bp
           RR>              08  3bps     s
   5-year  <PL5YT=  2.49  -0.0   +29  -3bp
           RR>         2    08  6bps     s
           <PL10YT  3.06  -0.0   +30  -6bp
 10-year   =RR>        7    17  1bps     s
           FORWARD  RATE  AGREEMENT       
                    3x6   6x9   9x12  3M
                                      inte
                                      rban
                                      k
 Czech     <CZKFRA  0.28  0.26  0.23     0
 Rep       ><PRIBO                    
           R=>                        
 Hungary   <HUFFRA  0.78  0.77  0.78  0.87
           ><BUBOR                    
           =>                         
 Poland    <PLNFRA  1.73  1.73  1.73  1.72
           ><WIBOR     5     5     5  
           =>                         
 Note:     are for                        
 FRA       ask                        
 quotes    prices                     
 *****************************************
 *********************
 
    
    

 (Reporting by Sandor Peto; Editing by Alexandra Hudson and John
Stonestreet)

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