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CEE MARKETS-Bond yields rise ahead of Hungarian auction on dollar strength
September 28, 2017 / 9:22 AM / 21 days ago

CEE MARKETS-Bond yields rise ahead of Hungarian auction on dollar strength

    * Bond yields up, tracking U.S. and euro zone peers
    * Hungary expected to sell bonds at higher yields at auction
    * Forint, zloty trade near multi-month lows vs euro
    * Czech crown stays near 26/euro in international trade

    By Sandor Peto
    BUDAPEST, Sept 28 (Reuters) - Central European government
bonds and currencies eased on Thursday as U.S. tax-reform plans
announced on Wednesday underpinned the dollar and cut appetite
for assets in emerging markets.
    The dollar's strength, also helped by hawkish comments from
Federal Reserve Chair Janet Yellen, have weighed on Central
Europe's most liquid currencies, the zloty and the forint, this
week.
    They have also been weakened by measures to ease monetary
policy that Hungary took last week and by concern over new
Polish proposals for its judiciary reform, which has soured
Warsaw's relations with some major European capitals.
    Both currencies traded near multi-month lows, with the
forint shedding 0.2 percent to 311.71 against the euro
by 09833 GMT.
    The zloty, after a heavy beating on Wednesday, was steady at
4.3175, staying weaker than the 4.3 psychological line.
    Government bond yields in the region tracked their U.S. and
euro zone peers higher. Hungary's 10-year yield rose 9 basis
points from Wednesday's fixing to 2.58 percent. Poland's
comparable yield rose 2 basis points to 3.371 percent.
    That reversed a rally in Hungary where the central bank's
pledge for measures to boost demand for government debt had
pushed down yields to record lows.
    At the increased yields, the government is likely to sell
3-, 5- and 10-year bonds easily at an auction on Thursday,
traders said.
    Demand for the shortest maturity could suffer, though,
because the debt agency AKK told traders on Wednesday that it
had suspended holding buyback auctions for an indefinite time,
traders said.
    "The bonds will be  sold at the increased yields," one
trader said.
    "The U.S. tax package, however, creates uncertainty as
investors are considering now if the plans overwrite
expectations about monetary policies," one trader said.
    Czech markets were closed for a national holiday on
Thursday.
    The crown was steady at 26.036 against the euro at
0851 GMT.
    On Wednesday, the Czech central bank voted by a slim margin
against raising interest rates further, disappointing some
investors. Many still expect the bank to increase interest rates
at its next meeting in November.
     
               CEE MARKETS  SNAPSH   AT  1033 CET         
                            OT                      
                            CURRENCIES                    
                            Latest  Previo  Daily   Change
                                    us              
                            bid     close   change  in
                                                    2017
 Czech crown                26.036  26.028  -0.03%   3.73%
                                 0       5          
 Hungary                    311.71  311.16  -0.18%  -0.93%
 forint                         00      00          
 Polish zloty               4.3175  4.3194   +0.04   2.00%
                                                 %  
 Romanian leu               4.5990  4.5963  -0.06%  -1.39%
 Croatian                   7.5020  7.5015  -0.01%   0.71%
 kuna                                               
 Serbian                    119.31  119.46   +0.13   3.39%
 dinar                          00      00       %  
 Note: daily   calculated   previo  close   1800          
 change        from         us      at      CET     
                            STOCKS                        
                            Latest  Previo  Daily   Change
                                    us              
                                    close   change  in
                                                    2017
 Prague                     1043.6  1042.5   +0.11   +13.2
                                 8       0       %      5%
 Budapest                   37449.  37244.   +0.55   +17.0
                                07      30       %      2%
 Warsaw                     2435.5  2433.8   +0.07   +25.0
                                 0       2       %      3%
 Bucharest                  7908.1  7914.2  -0.08%   +11.6
                                 6       4              2%
 Ljubljana                  800.51  798.30   +0.28   +11.5
                                                 %      6%
 Zagreb                     1799.5  1804.0  -0.25%  -9.79%
                                 8       3          
 Belgrade                   723.41  721.17   +0.31   +0.84
                                                 %       %
 Sofia                      686.40  684.12   +0.33   +17.0
                                                 %      5%
                            BONDS                         
                            Yield   Yield   Spread  Daily
                            (bid)   change  vs      change
                                            Bund    in
 Czech                                              spread
 Republic                                           
   2-year                    0.196   0.424   +088b   +41bp
                                                ps       s
   5-year                    0.246  -0.002   +049b   -3bps
                                                ps  
   10-year                   1.148  -0.081   +066b  -11bps
                                                ps  
 Poland                                                   
   2-year                    1.745   0.018   +243b   +1bps
                                                ps  
   5-year                    2.714   0.042   +296b   +1bps
                                                ps  
   10-year                   3.394   0.023   +290b   +0bps
                                                ps  
               FORWARD      RATE    AGREEMENT             
                            3x6     6x9     9x12    3M
                                                    interb
                                                    ank
 Czech Rep             <PR    0.73    0.88       1       0
               IBOR=>                               
 Hungary               <BU    0.08    0.12    0.16    0.04
               BOR=>                                
 Poland                <WI   1.764   1.825   1.881    1.73
               BOR=>                                
 Note: FRA     are for ask                                
 quotes        prices                               
 *********************************************************
 *****
 
 (Reporting by Sandor Peto, editing by Larry King)
  
 
 

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