April 17, 2018 / 10:17 AM / 5 months ago

CEE MARKETS-Currencies retreat on technicals, mixed global mood

    * Main CEE currencies off two-month highs
    * Forint bounces back from 250 to the dollar
    * Polish bond prices give up ground
    * Hungarian central bank may put brake on forint-analyst

    By Sandor Peto
    BUDAPEST, April 17 (Reuters) - Central European currencies
mostly retreated on Tuesday from their two-month highs after
hitting technical barriers and running into worries about other
emerging markets.
    The region's main currencies had reached their strongest
levels since February on Monday, even though Hungary and Poland
are keeping interest rates lows while the Czech and Romanian
central banks have started to raise them.
    The leu shed 0.2 percent to 4.6485 against the
euro after surging on Monday, when the Romanian central bank
took steps to drain market liquidity through a long-unused
deposit facility.
    The central bank may keep monetary conditions tight or even
raise its benchmark rate, after annual inflation rose to a
five-year high in March, analysts have said.
    Long-term Romanian government bond yields were mixed, not
tracking a rise in Polish peers. Poland's 10-year yield rose 3
basis points to 3.1075 percent, up from the sub-3 percent levels
reached after weeks of decline by late last week.
    "When core markets start to weaken, the domestic (Polish)
yields will be rising faster than the U.S. ones," BZ WBK
analysts said in a note.
    The zloty weakened to 4.1585 per euro and the
forint to 310.60, both down 0.1 percent but remaining
near their two-month highs.
    The forint's weakening may have been caused by its retreat
from the resistance line of 250 to the dollar, one
Budapest-based trader said.
    Investors were also watching the National Bank of Hungary
(NBH), which may not want the forint to return to the firmer
side of 310, market participants said.
    That may be indicated by a slight increase in market
liquidity after a NBH swap tender on Monday, Raiffeisen analyst
Gergely Palffy said in a note.
    "The NBH has been micro-managing the exchange rate through a
range of unconventional measures for years and is expected to
continue to keep the EUR/HUF spot and implied volatility as
stable as possible in the future as well," he said, adding that
a range of 310-315 was likely in the coming months.
    
            CEE       SNAPSHOT   AT                         
            MARKETS             1056 CET            
                      CURRENCI                              
                      ES                            
                      Latest    Previous  Daily     Change
                      bid       close     change    in 2018
 Czech      <EURCZK=   25.2540   25.2620    +0.03%    +1.14%
 crown      >                                       
 Hungary    <EURHUF=  310.6000  310.3300    -0.09%    +0.10%
 forint     >                                       
 Polish     <EURPLN=    4.1585    4.1558    -0.06%    +0.43%
 zloty      >                                       
 Romanian   <EURRON=    4.6485    4.6400    -0.18%    +0.67%
 leu        >                                       
 Croatian   <EURHRK=    7.4105    7.4133    +0.04%    +0.27%
 kuna       >                                       
 Serbian    <EURRSD=  117.9700  118.1100    +0.12%    +0.45%
 dinar      >                                       
 Note:      calculated from               1800 CET          
 daily                                              
 change                                             
                                                            
                      Latest    Previous  Daily     Change
                                close     change    in 2018
 Prague                1129.42  1136.600    -0.63%    +4.75%
                                       0            
 Budapest             38267.79  38296.28    -0.07%    -2.82%
 Warsaw                2299.45   2300.20    -0.03%    -6.57%
 Bucharest             8903.76   8903.60    +0.00%   +14.83%
 Ljubljana  <.SBITOP    834.98    838.31    -0.40%    +3.55%
            >                                       
 Zagreb                1769.75   1772.09    -0.13%    -3.97%
 Belgrade   <.BELEX1    738.84    741.22    -0.32%    -2.76%
            5>                                      
 Sofia                  659.62    662.99    -0.51%    -2.63%
                      BONDS                                 
                      Yield     Yield     Spread    Daily
                      (bid)     change    vs Bund   change
                                                    in
 Czech                                              spread
 Republic                                           
   2-year   <CZ2YT=R    0.7810   -0.0110   +136bps     +0bps
            R>                                      
   5-year   <CZ5YT=R    1.1900   -0.0030   +127bps     +0bps
            R>                                      
   10-year  <CZ10YT=    1.8060    0.0150   +128bps     +1bps
            RR>                                     
 Poland                                                     
   2-year   <PL2YT=R    1.5590    0.0030   +213bps     +1bps
            R>                                      
   5-year   <PL5YT=R    2.3660    0.0000   +244bps     +0bps
            R>                                      
   10-year  <PL10YT=    3.1240    0.0380   +260bps     +4bps
            RR>                                     
            FORWARD   RATE      AGREEMEN                    
                                T                   
                      3x6       6x9       9x12      3M
                                                    interban
                                                    k
 Czech Rep                0.95      1.05      1.19      0.90
            <PRIBOR=                                
            >                                       
 Hungary                  0.07      0.09      0.15      0.03
                                                    
 Poland                   1.72      1.74      1.78      1.70
                                                    
 Note: FRA  are for ask prices                              
 quotes                                             
 *************************************************          
 *************                                      
 
 (Reporting by Sandor Peto, editing by Larry King)
  
 
 
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