December 6, 2018 / 10:20 AM / 8 months ago

CEE MARKETS-Central European stocks fall amid global trade war fears

    BUDAPEST, Dec 6 (Reuters) - Warsaw led a fall on Central
European bourses on Thursday due to gloom and doom on global
stock markets amid risk aversion and deep concerns about the
impact of the U.S.-China trade war.
    Warsaw's blue-chip equities index fell 1.9 percent
by 0931 GMT, while the Budapest bourse's main index plunged 1.2
percent, relinquishing some of its recent sharp gains.
    "Today we expect similar dynamics (as yesterday) because
western European stock futures show a fall of over 1 percent,"
brokerage Equilor said in an early morning note.
    Oil prices fell on Thursday as stock markets slid and as
traders eyed a meeting of the oil bloc expected to result in a
supply cut, aimed at draining a glut that has pulled down crude
prices by 30 percent since October.
    While stocks eased across the board on Central European
markets, currencies were little changed in early trade. 
    The Polish zloty shed 0.1 percent to trade at
4.2915 against the euro at 0931 GMT. The Hungarian forint
 was also down 0.1 percent at 323.63 to the euro.
    According to a fresh Reuters poll released on Thursday, the
Czech crown is expected to gain the most among Central European
currencies next year, helped by the Czech central bank's
anti-inflationary policy.
    While global markets fret about a global economic slowdown
this year, data released in recent weeks in Central Europe
continue to indicate strong growth.
    Hungary expects its economy to expand by 4.3-4.5 percent
this year and above 4 percent next year as well.
    At the same time, inflation fears have receded, which has 
helped Polish and Hungarian central banks maintain their dovish
stance even though their Czech and Romanian counterparts have
already started tightening policy.
    Polish Central Bank Governor Adam Glapinski repeated on
Wednesday his long-standing opinion that there was no need to
raise interest rates in 2019. The bank kept interest rates on
hold at 1.5 percent.
    "Overall, there is no change in the MPC policy outlook, in
our view. Interest rates are going to stay on hold at least
until the very end of 2019, and maybe even longer," Santander
Bank Polska said in a note.
    "The NBP believes its policy stance is appropriate, and
indicates that risks from energy price hikes have abated
somewhat. We still see no room for rate hikes next year," Morgan
Stanley analysts said in a note.
    Hungary will sell government bonds at a regular biweekly
auction on Thursday.
    In Romania, the government is selling Sept. 2031 bonds. 
    "This is a rather illiquid paper, and the finance ministry
could sell less than planned as demand is likely to be limited,"
ING said in a research note. "Average yields could print near
secondary market mid of 5.30 percent."    
                   CEE       SNAPSHOT   AT  1019                 
                   MARKETS             CET                
                             Latest    Previous   Daily   Change
                             bid       close      change  in 2018
 EURCZK=  Czech    <EURCZK=   25.8990    25.9200   +0.08   -1.38%
          crown    >                                   %  
 EURHUF=  Hungary  <EURHUF=  323.6900   323.4900  -0.06%   -3.95%
          forint   >                                      
 EURPLN=  Polish   <EURPLN=    4.2915     4.2867  -0.11%   -2.68%
          zloty    >                                      
 EURRON=  Romania  <EURRON=    4.6550     4.6558   +0.02   +0.53%
          n leu    >                                   %  
 EURHRK=  Croatia  <EURHRK=    7.3920     7.3985   +0.09   +0.52%
          n kuna   >                                   %  
 EURRSD=  Serbian  <EURRSD=  118.0300   118.1200   +0.08   +0.40%
          dinar    >                                   %  
          Note:    calculated from                1800           
          daily                                   CET     
                             Latest    Previous   Daily   Change
                                       close      change  in 2018
 .PX      Prague              1042.49  1051.0000  -0.81%   -3.31%
 .BUX     Budapes            40195.28   40670.44  -1.17%   +2.08%
 .WIG20   Warsaw              2310.00    2354.54  -1.89%   -6.14%
 .BETI    Buchare             8709.91    8749.59  -0.45%   +12.33
          st                                                    %
 .SBITOP  Ljublja  <.SBITOP    814.85     815.93  -0.13%   +1.05%
          na       >                                      
 .CRBEX   Zagreb              1738.90    1741.04  -0.12%   -5.64%
 .BELEX1  Belgrad  <.BELEX1    737.56     736.80   +0.10   -2.93%
 5        e        5>                                  %  
 .SOFIX   Sofia                595.32     597.25  -0.32%  -12.12%
                             Yield     Yield      Spread  Daily
                             (bid)     change     vs      change
                                                  Bund    in
          Czech                                           spread
 CZ2YT=R           <CZ2YT=R    1.6610     0.0470   +227b    +5bps
 R        2-year   R>                                 ps  
 CZ5YT=R           <CZ5YT=R    1.8480     0.0880   +213b    +9bps
 R        5-year   R>                                 ps  
 CZ10YT=           <CZ10YT=    2.0570     0.0170   +180b    +4bps
 RR       10-year  RR>                                ps  
 PL2YT=R           <PL2YT=R    1.5710     0.0070   +218b    +1bps
 R        2-year   R>                                 ps  
 PL5YT=R           <PL5YT=R    2.5100     0.0090   +279b    +1bps
 R        5-year   R>                                 ps  
 PL10YT=           <PL10YT=    3.0750     0.0150   +282b    +3bps
 RR       10-year  RR>                                ps  
                   FORWARD   RATE      AGREEMENT                 
                             3x6       6x9        9x12    3M
          Czech                  2.18       2.30    2.37     2.01
          Rep      <PRIBOR=                               
          Hungary                0.31       0.54    0.84     0.13
          Poland                 1.75       1.77    1.80     1.72
          Note:    are for ask prices                            

 (Reporting by Krisztina Than and Luiza Ilie in Bucharest
Editing by Mark Heinrich)
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