September 6, 2019 / 10:32 AM / 10 days ago

CEE MARKETS-FX in holding pattern, stocks mixed ahead of U.S. payrolls

    WARSAW, Sept 6 (Reuters) - Central European assets were
little changed on Friday, with local economic data failing to
move markets as investors' attention turned to a key U.S. jobs
report later in the day.
    Markets got a boost in recent days after the United States
and China scheduled trade talks and the ADP National Employment
Report in the United States showed private payrolls surging by
195,000 jobs this month after rising by 142,000 in July. That
bolstered the chances of a strong reading of the U.S. non-farm
payrolls (NFP) report, due out on Friday.
    "Strong print of the ADP report makes the positive surprise
in NFP more likely," Santander Bank Polska analysts said in a
note.
    A Warsaw-based currency dealer said that a positive payrolls
print would be broadly neutral for the Polish zloty as the boost
to sentiment in global markets from strong U.S. jobs data would
also fuel a stronger dollar.
    The region's main currencies mostly ticked less than
0.1%weaker, hovering in recent trading ranges, with the zloty
 bid at 4.339 against the euro, the Czech crown
 at 25.835 and the Hungarian forint at
329.95.
    Stocks were mixed, with Poland's WIG 20 index
rising 0.5%, while in Prague the PX index fell 0.64% and
in Budapest shares were down 0.3%
    The region's assets have largely failed to benefit from some
strong domestic economic data recently as investors warily eye
risks coming from global trade tensions, a sputtering German
economy and risks of a disorderly British exit from the European
Union.
     Czech working day adjusted industrial output rose by a
lower-than-expected 0.1% year-on-year in July, data from the
statistics office showed on Friday.
    "(This) can still be viewed as a relatively positive number
given the risks and compared with the manufacturing data in
Germany," Erste Group Bank/Ceska Sporitelna economist Jiri
Polansky wrote in a note.
    In Hungary, industrial output jumped by an
annual 12% in July based on preliminary unadjusted data, after a
1.4% drop in June.
    "According to preliminary data, the surprisingly strong
industrial performance is due to car manufacturing, while other
important sectors depicted below-average growth rate," Peter
Virovacz Senior Economist at ING in Hungary said in a note.
    Polish 10-year bond yields rose 1 basis point to
2.007%, while in the Czech Republic 10-year yields fell 7 basis
points to 1.138 after rising sharply on Thursday.
    Poland sold bonds worth 5.7 billion zlotys ($1.5 billion) on
Thursday at a switch tender, and announced that it had already
covered about 20% of its 2020 borrowing needs.
    "The Ministry of Finance can talk about luck, because at the
switch auction (it) managed to place treasury papers before the
strongest sell-off hit in the second part of the session," PKO
Bank Polski analysts said in a note.
    "In the coming days, the sell-off of bonds may continue...
In the 10-year sector, a clearer and more durable break of
psychological resistance at 2% is very likely."
    
                   CEE      SNAPSHO   AT                      
                   MARKETS  T        1146              
                                     CET               
                            CURRENC                           
                            IES                        
                            Latest   Previou  Daily    Change
                                     s                 
                            bid      close    change   in 2019
 EURCZK  Czech     <EURCZK  25.8350  25.8300   -0.02%   -0.50%
 =       crown     =>                                  
 EURHUF  Hungary   <EURHUF  329.950  329.690   -0.08%   -2.69%
 =       forint    =>             0        0           
 EURPLN  Polish    <EURPLN   4.3392   4.3367   -0.06%   -1.14%
 =       zloty     =>                                  
 EURRON  Romanian  <EURRON   4.7339   4.7303   -0.08%   -1.69%
 =       leu       =>                                  
 EURHRK  Croatian  <EURHRK   7.4025   7.4033   +0.01%   +0.10%
 =       kuna      =>                                  
 EURRSD  Serbian   <EURRSD  117.500  117.540   +0.03%   +0.68%
 =       dinar     =>             0        0           
         Note:     calculated from            1800            
         daily                                CET      
         change                                        
                                                              
                            Latest   Previou  Daily    Change
                                     s                 
                                     close    change   in 2019
 .PX     Prague             1032.79  1040.28   -0.72%   +4.69%
                                          00           
 .BUX    Budapest           40062.6  40180.9   -0.29%   +2.36%
                                  7        0           
 .WIG20  Warsaw    <.WIG20  2114.88  2106.89   +0.38%   -7.10%
                   >                                   
 .BETI   Buchares           9247.52  9251.48   -0.04%   +25.24
         t                                                   %
 .SBITO  Ljubljan  <.SBITO   846.99   849.49   -0.29%   +5.31%
 P       a         P>                                  
 .CRBEX  Zagreb    <.CRBEX  1861.23  1865.86   -0.25%   +6.43%
                   >                                   
 .BELEX  Belgrade  <.BELEX   749.86   746.85   +0.40%   -1.55%
 15                15>                                 
 .SOFIX  Sofia     <.SOFIX   574.17   574.17   +0.00%   -3.41%
                   >                                   
                            BONDS                             
                            Yield    Yield    Spread   Daily
                            (bid)    change   vs Bund  change
                                                       in
         Czech                                         spread
         Republic                                      
 CZ2YT=    2-year  <CZ2YT=   1.2160   0.0300   +207bp    +3bps
 RR                RR>                              s  
 CZ5YT=    5-year  <CZ5YT=   0.9490   0.0260   +183bp    +3bps
 RR                RR>                              s  
 CZ10YT            <CZ10YT   1.1850  -0.0270   +179bp    -2bps
 =RR     10-year   =RR>                             s  
         Poland                                               
 PL2YT=    2-year  <PL2YT=   1.5860   0.0230   +244bp    +2bps
 RR                RR>                              s  
 PL5YT=    5-year  <PL5YT=   1.8090   0.0080   +269bp    +2bps
 RR                RR>                              s  
 PL10YT            <PL10YT   2.0300   0.0340   +263bp    +4bps
 =RR     10-year   =RR>                             s  
                   FORWARD  RATE     AGREEME                  
                                     NT                
                            3x6      6x9      9x12     3M
                                                       interba
                                                       nk
         Czech     <CZKFRA     2.10     1.98     1.83     2.14
         Rep       ><PRIBO                             
                   R=>                                 
         Hungary   <HUFFRA     0.30     0.32     0.37     0.24
                   ><BUBOR                             
                   =>                                  
         Poland    <PLNFRA     1.74     1.72     1.69     1.72
                   ><WIBOR                             
                   =>                                  
         Note:     are for ask                                
         FRA       prices                              
         quotes                                        
         ********************************************         
         ******************                            
 

($1 = 3.9347 zlotys)

 (Reporting by Alan Charlish and Aleksandra Modrzejewska in
Warsaw, Jason Hovet in Prague and Krisztina Than in Budapest;
Editing by Susan Fenton)
  
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