Reuters logo
CEE MARKETS-Crown bucks rebound, geopolitical worries eyed
April 18, 2017 / 9:28 AM / 7 months ago

CEE MARKETS-Crown bucks rebound, geopolitical worries eyed

    * Currencies off Monday's lows after Turkish referendum
    * Stocks retreat, geopolitical worries remain
    * Czech crown weakest since April 6 removal of its cap
    * Hopes for bigger short-term Czech crown surge have faded

 (Adds rebound of Croatian stocks)
    By Sandor Peto and Jason Hovet
    BUDAPEST/PRAGUE, April 18 (Reuters) - Central European
currencies rebounded on Tuesday after Turkey's referendum,
removing some uncertainty in emerging markets, while Croatian
stocks surged following a cash injection to troubled Agrokor.
    The Czech crown, however, eased past 26.8 against the euro,
reaching its weakest levels since the Czech central bank removed
its cap on the currency on April 6.
    The forint, after touching 4-month lows at 313.81
against the euro on Monday, firmed 0.3 percent to 312.70 by 1312
GMT.
    Appetite for emerging market assets in general got a lift
from the victory of the "yes" vote in the Turkish referendum,
giving more powers to President Tayyip Erdogan, but remaining
political uncertainty in Turkey and elsewhere in the world
abounds.
    "There is Korea, the Turks and also the upcoming French
elections," one Budapest-based currency dealer said, adding that
jolts in the euro/dollar cross also blurred the outlook.
    The market risks, including the first round of France's
two-step presidential election on April 23, could weigh on
Romania's leu, which also firmed slightly on Tuesday,
ING analysts said in a note.
    "The unease is caused by the fact that some (French
presidential) candidates are vocally anti-EU," they said. The
runoff round will be on May 7.
    The region's stock indices mostly retreated after an initial
rise, tracking a fall of Asian and Western European peers, with
Prague and Budapest shedding about 0.7 percent.
    Zagreb's main stock index bucked the trend, jumping
2 percent.
    It started to rebound last week after indebted Agrokor
          , Croatia's largest private firm and the biggest
employer in the Balkan region, secured an initial cash
injection.
    The stocks of builder Viadukt rose 32 percent from
their lowest levels in at least 12 years, while ice cream
producer Ledo jumped 18 percent.
    The Czech crown traded at 26.72 against the euro, off an
early low at 26.812 but weaker by 0.3 percent from Monday.
    The currency peaked at 26.5 last week, after the central
bank removed the cap which had kept it weaker than 27 since
2013.
    The size of those gains disappointed most investors who had
bought tens of billions of euros worth of crowns, speculating on
a surge after exit from the cap.
    A recent Reuters poll of analysts projected that the
strength of the Czech economy could boost the crown to 25.7 by
end-March 2018, but many analysts hoped for opportunities to
close their euro selling positions earlier, with bigger profits.
    "Short position investors are waiting for 26.20. No one is
closing positions at these levels, long-term it is going (to
strengthen) so why stop it here," one Prague-based dealer said.
    
              CEE        SNAPS   AT  1512          
              MARKETS    HOT    CET           
                         CURRENCIES                
                         Lates  Previ  Daily  Chang
                         t      ous           e
                         bid    close  chang  in
                                       e      2017
 Czech crown             26.72  26.64  -0.27  1.07%
                            00     80      %  
 Hungary                 312.7  313.7   +0.3  -1.24
 forint                    000    100     2%      %
 Polish                  4.232  4.251   +0.4  4.06%
 zloty                       0      5     6%  
 Romanian                4.521  4.524   +0.0  0.30%
 leu                         5      4     6%  
 Croatian                7.437  7.429  -0.10  1.59%
 kuna                        0      2      %  
 Serbian                 123.5  123.6   +0.0  -0.15
 dinar                     400    400     8%      %
 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                  970.0  976.5  -0.66   +5.2
                             4      2      %     5%
 Budapest                32370  32622  -0.77   +1.1
                           .94    .40      %     5%
 Warsaw                  2239.  2233.   +0.2   +14.
                            71     63     7%    98%
 Bucharest               8224.  8258.  -0.41   +16.
                            47     73      %    08%
 Ljubljana               778.1  778.2  -0.01   +8.4
                             6      4      %     4%
 Zagreb                  1942.  1905.   +1.9  -2.62
                            49     29     5%      %
 Belgrade     <.BELEX15  726.6  732.0  -0.74   +1.3
              >              9      9      %     0%
 Sofia                   650.6  657.7  -1.09   +10.
                             0      9      %    94%
                         BONDS                     
                         Yield  Yield  Sprea  Daily
                                       d      
                         (bid)  chang  vs     chang
                                e      Bund   e in
 Czech                                        sprea
 Republic                                     d
   2-year     <CZ2YT=RR  -0.01  0.071   +084   +6bp
              >              3           bps      s
   5-year     <CZ5YT=RR  0.271  0.009   +079   +1bp
              >                          bps      s
   10-year    <CZ10YT=R   1.01  -0.06   +083  -6bps
              R>                    5    bps  
 Poland                                            
   2-year     <PL2YT=RR  2.005  -0.00   +285  -1bps
              >                     3    bps  
   5-year     <PL5YT=RR   2.85  0.003   +337   +0bp
              >                          bps      s
   10-year    <PL10YT=R  3.384  -0.02   +320  -1bps
              R>                    3    bps  
              FORWARD    RATE   AGREEMENT          
                         3x6    6x9    9x12   3M
                                              inter
                                              bank
 Czech Rep            <    0.3    0.3   0.37      0
              PRIBOR=>                        
 Hungary              <    0.2  0.265   0.34   0.16
              BUBOR=>                         
 Poland               <  1.749   1.77  1.815   1.73
              WIBOR=>                         
 Note: FRA    are for                              
 quotes       ask                             
              prices                          
 **************************************************
 ************
 
 (Additional reporting from Radu Marinas in Bucharest; Editing
by Tom Heneghan)
  
 
 

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below