May 7, 2019 / 9:40 AM / a month ago

CEE MARKETS-Currencies, some stocks ease amid worries over US-China trade war

    * Main currencies ease a shade as dollar firms vs the euro
    * Fears of worsening U.S.-Chinese trade war dampens markets
    * Stocks stay rangebound and mixed despite rebound in Asia

    By Sandor Peto
    BUDAPEST, May 7 (Reuters) - Central Europe's main currencies
and some traded stocks eased slightly on Tuesday amid jitters
over a possible escalation in the trade dispute between the
United States and China, the world's two largest economies.
    The forint, the zloty and the leu
 shed 0.1 percent versus the euro by 0842 GMT.
    "This is simply because of some strengthening of the
dollar...The trade war is still around and the mood favours safe
currencies like the dollar and the yen," a Budapest-based dealer
said.
    The dollar traded on the strong side of the 1.2 line versus
the euro, the currency of Central Europe's main economic
partners.
    The United States is also mulling introducing tariffs on car
imports from the European Union, which could hit the booming
vehicle industry of the bloc's eastern states.
    Late Monday's news of a deepening rift between Hungary's
ruling party Fidesz and Europe's main centre-right group had no
apparent impact on Hungarian markets.
    "That has been mostly priced in," the dealer said, adding
that if Fidesz finally quit the European People's Party, in
which it has already suspended its membership, that could have
some negative effect on markets.
    April inflation figures to be released in some countries of
the region, including Hungary, in the next few days may lead to
bigger market movements, market participants said.
    "We do not see flows, like any big forint selling at the
moment," the dealer said.
    Central European stocks were mostly rangebound despite some
rebound in emerging market shares as London
and Frankfurt also stayed in the red.
    Warsaw's bluechip index, shedding 0.2 percent,
stayed near its lowest levels this year, and the index of
Warsaw-listed banks was near 5-week lows, also dropping
by 0.2 percent.
    Bank officials in a survey by the Polish central bank
indicated a tightening in lending policies as the economy is
slowing, Santander Bank analysts said in a note.
    Banks listed in Prague were mixed and rangebound after a
fall in the previous session because Czech Prime Minister Andrej
Babis said on Sunday that banks should pay part of their
dividends into a new state development fund.
    Demand for credit from households rose further, Santander
said.
    A surge in wages across the region also continued to fuel
strong annual growth in Czech retail sales, though the 4.3
percent figure for March released on Tuesday was slightly below
forecasts.
    The crown was steady at 25.73 versus the euro, on
the strong side of its 200-day moving average. 
    Czech and Polish government bond yields tracked a drop in
Bund yields. The 10-year Polish yields dropped 2 basis points to
2.983 percent.    
            CEE       SNAPSHOT   AT                         
            MARKETS             1042 CET            
                      CURRENCI                              
                      ES                            
                      Latest    Previous  Daily     Change
                      bid       close     change    in 2019
 Czech      <EURCZK=   25.7300   25.7270    -0.01%    -0.09%
 crown      >                                       
 Hungary    <EURHUF=  323.9300  323.7200    -0.06%    -0.88%
 forint     >                                       
 Polish     <EURPLN=    4.2860    4.2834    -0.06%    +0.08%
 zloty      >                                       
 Romanian   <EURRON=    4.7585    4.7547    -0.08%    -2.20%
 leu        >                                       
 Croatian   <EURHRK=    7.4100    7.4115    +0.02%    +0.00%
 kuna       >                                       
 Serbian    <EURRSD=  117.8400  117.9500    +0.09%    +0.39%
 dinar      >                                       
 Note:      calculated from               1800 CET          
 daily                                              
 change                                             
                                                            
                      Latest    Previous  Daily     Change
                                close     change    in 2019
 Prague                1065.10  1064.710    +0.04%    +7.96%
                                       0            
 Budapest             41365.73  41547.35    -0.44%    +5.69%
 Warsaw                2285.58   2290.13    -0.20%    +0.39%
 Bucharest             8389.25   8380.61    +0.10%   +13.62%
 Ljubljana  <.SBITOP    882.27    880.66    +0.18%    +9.70%
            >                                       
 Zagreb                1831.33   1827.45    +0.21%    +4.72%
 Belgrade   <.BELEX1    741.22    742.64    -0.19%    -2.69%
            5>                                      
 Sofia                  567.06    571.30    -0.74%    -4.61%
                      BONDS                                 
                      Yield     Yield     Spread    Daily
                      (bid)     change    vs Bund   change
                                                    in
 Czech                                              spread
 Republic                                           
   2-year   <CZ2YT=R    1.6360   -0.1410   +225bps    -13bps
            R>                                      
   5-year   <CZ5YT=R    1.7570   -0.0700   +220bps     -5bps
            R>                                      
   10-year  <CZ10YT=    1.8810    0.0000   +189bps     +2bps
            RR>                                     
 Poland                                                     
   2-year   <PL2YT=R    1.6900   -0.0150   +230bps     -1bps
            R>                                      
   5-year   <PL5YT=R    2.3360   -0.0230   +278bps     -1bps
            R>                                      
   10-year  <PL10YT=    3.0030   -0.0210   +301bps     +0bps
            RR>                                     
            FORWARD   RATE      AGREEMEN                    
                                T                   
                      3x6       6x9       9x12      3M
                                                    interban
                                                    k
 Czech Rep                2.24      2.26      2.26      2.20
            <PRIBOR=                                
            >                                       
 Hungary                  0.33      0.48      0.68      0.16
                                                    
 Poland                   1.75      1.76      1.79      1.72
                                                    
 Note: FRA  are for ask prices                              
 quotes                                             
 *************************************************          
 *************                                      
 
 (Reporting by Sandor Peto
Editing by Mark Heinrich)
  
 
 
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