* Hungary, Bucharest sells more bonds than planned at
auctions
* Recent yield rise, driven by USTs, helps CEE bonds
* Warsaw stocks set 3-month low, global fall grips CEE
shares
(Adds results of Hungary and Romania's government bond
auctions)
By Sandor Peto
BUDAPEST, Oct 11 (Reuters) - Central European government
bonds mostly rebounded on Thursday as Hungary and Romania's
auctions drew strong demand after a recent rise in yields, while
a global sell-off hit regional stocks.
A jump in U.S. Treasury yields boosted medium and long-term
yields in the region as well in recent days, mainly in Hungary
where the central bank has Central Europe's lowest short-term
interest rates.
But the 10-year U.S. yield retreated by the
early hours in European trade, and stayed low after U.S. figures
later in the day showed a slowdown in inflation in September.
The data, slightly below forecasts, make it unlikely that
the Federal Reserve accelerates its rate hikes. This is positive
for Central European bonds, as higher U.S. rates would make them
relatively less attractive.
October's government bond yield rises, which boosted
Hungary's 10-year yield by late Wednesday to its highest level
since the middle of 2015, boosted appetite at tenders in
Budapest and Bucharest on Thursday.
Hungary sold bonds worth 108 billion forints at its
auctions, almost twice as much as originally planned.
"Demand was high because yields were high," one
Budapest-based fixed income trader said.
"It is hard to say who wanted to buy the bonds: some of them
may have closed shorts, but other may have been outright
buyers," the trader added.
Hungary's 10-year bond yield traded at 3.89 percent late in
the session, 2 basis points above the average auction yield, but
down 2 basis points from Wednesday's midday fixing.
Romania also sold more 2-year bonds than planned at its
tender, at an average yield of 4.07 percent, up 17 basis points
from a sale four weeks ago.
Czech and Polish 5 and 10-year bond yields were bid lower by
2-4 basis points and the longer Polish paper trading
at 3.275 percent, down 4 basis points.
The forint and the Czech crown firmed
0.1 percent against the euro by 1428 GMT as the dollar
was sold in global markets.
But the region's main equities indices fell to multi-week
lows as sentiment soured due to a plunge in stocks on Wall
Street and in Asia.
The global sell-off was partly caused by comments from
International Monetary Fund head Christine Lagarde who said
stock market valuations had been "extremely high".
Budapest led the fall, with its main index shedding
1.8 percent to a two-week low.
Warsaw's bluechip index touched a 3-month low and
eased 1.4 percent.
Poland's top fashion retailer LPP shares fell
almost 4 percent to a 10-month low.
CEE SNAPSHOT AT
MARKETS 1628 CET
CURRENCI
ES
Latest Previous Daily Change
bid close change in 2018
Czech <EURCZK= 25.8330 25.8640 +0.12% -1.13%
crown >
Hungary <EURHUF= 324.8500 325.3000 +0.14% -4.29%
forint >
Polish <EURPLN= 4.3090 4.3115 +0.06% -3.08%
zloty >
Romanian <EURRON= 4.6662 4.6670 +0.02% +0.29%
leu >
Croatian <EURHRK= 7.4170 7.4095 -0.10% +0.18%
kuna >
Serbian <EURRSD= 118.2500 118.3200 +0.06% +0.21%
dinar >
Note: calculated from 1800 CET
daily
change
Latest Previous Daily Change
close change in 2018
Prague 1083.68 1097.170 -1.23% +0.51%
0
Budapest 36150.59 36821.12 -1.82% -8.19%
Warsaw 2166.23 2197.34 -1.42% -11.99%
Bucharest 8402.29 8487.88 -1.01% +8.36%
Ljubljana <.SBITOP 818.80 830.31 -1.39% +1.54%
>
Zagreb 1754.55 1770.15 -0.88% -4.79%
Belgrade <.BELEX1 731.90 732.50 -0.08% -3.67%
5>
Sofia 609.09 617.42 -1.35% -10.09%
BONDS
Yield Yield Spread Daily
(bid) change vs Bund change
in
Czech spread
Republic
2-year <CZ2YT=R 1.6560 0.0950 +222bps +11bps
R>
5-year <CZ5YT=R 1.8340 -0.0350 +195bps -1bps
R>
10-year <CZ10YT= 2.1310 -0.0390 +161bps -1bps
RR>
Poland
2-year <PL2YT=R 1.6050 -0.0250 +217bps -1bps
R>
5-year <PL5YT=R 2.5840 -0.0320 +270bps -1bps
R>
10-year <PL10YT= 3.3040 -0.0160 +278bps +1bps
RR>
FORWARD RATE AGREEMEN
T
3x6 6x9 9x12 3M
interban
k
Czech Rep 2.02 2.20 2.33 1.75
<PRIBOR=
>
Hungary 0.48 0.81 1.14 0.17
Poland 1.76 1.83 1.88 1.72
Note: FRA are for ask prices
quotes
*************************************************
*************
(Additional reporting by Anna Koper in Warsaw,
Editing by Raissa Kasolowsky and Ed Osmond)
