Markets News

CEE MARKETS-Currencies, stocks tread cautiously as Brexit talks resume

    BUCHAREST, Oct 16 (Reuters) - Central European currencies
and stocks struggled to find direction in early trade on
Wednesday, with investors watching apprehensively as the clock
ran down on negotiations over a possible Brexit deal.
    British and European Union officials were to resume talks on
Wednesday, a few hours after late-night negotiations wound up,
but it was far from clear they would reach an agreement before
an EU summit on Thursday.
    By 0910 GMT, the Hungarian forint and Polish zloty
 were down 0.2% and 0.1% respectively, while the Czech
crown and Romanian leu were flat.
    Warsaw's blue chip index was up 0.2% on the day,
while Hungary's fell 0.2%. In Prague, stocks were up 0.1%
while Bucharest's was flat.
    "Zloty's performance this week will probably be determined
by the international situation," ING said in a note.
    In Romania, centrist President Klaus Iohannis appointed on
Tuesday opposition Liberal Party leader Ludovic Orban as prime
minister-designate to form a transitional government until a
parliamentary election next year.
    The leu held steady through a government collapse following
a no-confidence vote last week and negotiations for a new
parliamentary majority, but widening domestic deficits and
souring global economic prospects are weighing on assets.
    "While we would regard recent efforts to overcome the
political vacuum as basically positive, political uncertainty is
set to remain elevated in Romania," Raiffeisen Bank said in a
note, adding it would maintain its cautious stance on Romanian
government debt. 
    In Prague, two Czech rate-setters spoke in favour of
tightening interest rates, in contrast with other policymakers
in the region who have stayed on hold and the world's largest
central banks which have eased borrowing costs.
    The crown was unmoved by the comments.    
    Monetary policy loosening by the world's largest central
banks has so far eased pressure to act on policymakers in
central Europe, where consumption-driven economic growth has
mostly held up in the face of a euro zone slowdown and Brexit
            CEE       SNAPSHO   AT                      
            MARKETS   T        1131              
                      Latest   Previou  Daily    Change
                      bid      close    change   in 2019
 Czech      <EURCZK=  25.7800  25.7800   +0.00%   -0.28%
 crown      >                                    
 Hungary    <EURHUF=  333.000  332.100   -0.27%   -3.58%
 forint     >               0        0           
 Polish     <EURPLN=   4.2995   4.2920   -0.17%   -0.23%
 zloty      >                                    
 Romanian   <EURRON=   4.7530   4.7537   +0.01%   -2.08%
 leu        >                                    
 Croatian   <EURHRK=   7.4340   7.4353   +0.02%   -0.32%
 kuna       >                                    
 Serbian    <EURRSD=  117.400  117.470   +0.06%   +0.77%
 dinar      >               0        0           
 Note:      calculated from             1800            
 daily                                  CET      
 change Latest   Previou  Daily    Change
                               close    change   in 2019
 Prague               1019.45  1020.39   -0.09%   +3.33%
 Budapest             40532.7  40578.1   -0.11%   +3.56%
                            3        8           
 Warsaw               2156.71  2154.80   +0.09%   -5.27%
 Bucharest            9546.49  9545.34   +0.01%   +29.29
 Ljubljana  <.SBITOP   870.39   871.40   -0.12%   +8.22%
 Zagreb               2003.77  2000.79   +0.15%   +14.58
 Belgrade   <.BELEX1   744.83   742.41   +0.33%   -2.21%
 Sofia                 560.46   561.47   -0.18%   -5.72%
                      Yield    Yield    Spread   Daily
                      (bid)    change   vs Bund  change
 Czech                                           spread
   2-year   <CZ2YT=R   1.2900   0.0220   +197bp    +2bps
            R>                                s  
   5-year   <CZ5YT=R   1.0340  -0.0100   +171bp    -2bps
            R>                                s  
   10-year  <CZ10YT=   1.3770   0.0540   +180bp    +6bps
            RR>                               s  
   2-year   <PL2YT=R   1.5030  -0.0200   +218bp    -2bps
            R>                                s  
   5-year   <PL5YT=R   1.7320  -0.0310   +241bp    -4bps
            R>                                s  
   10-year  <PL10YT=   1.9870   0.0030   +241bp    +1bps
            RR>                               s  
            FORWARD   RATE     AGREEME                  
                      3x6      6x9      9x12     3M
 Czech Rep               2.28     2.29     2.20     2.17
 Hungary                 0.30     0.32     0.36     0.21
 Poland                  1.73     1.69     1.67     1.71
 Note: FRA  are for ask                                 
 quotes     prices                               
 (Reporting by Luiza Ilie in Bucharest, Anna Koper in Warsaw and
Robert Muller in Prague; Editing by Alex Richardson)