November 5, 2019 / 10:44 AM / 9 days ago

CEE MARKETS-FX, leu edge up as Romania gets new centrist government

    By Radu-Sorin Marinas
    BUCHAREST, Nov 5 (Reuters) - Central European currencies
edged up on Tuesday, with the leu helped by a vote of confidence
in Romania's new centrist government which wants to undo fiscal
and judicial measures introduced by a former socialist cabinet.
    Prime Minister Ludovic Orban's minority cabinet will be in
place until a parliamentary election in late 2020, but analysts
expect it to struggle to win support from among the fragmented
opposition to secure majorities for each bill.
    But the new cabinet will improve prospects for filling a
policymaking vacuum in the European Union. The new Commission
team had been due to take over on Nov. 1, but Bucharest's
tug-of-war prevented it from nominating a commissioner, a delay
that risked pushing the start date into December.
    Romania holds a presidential, two-round election starting on
Sunday, with incumbent Klaus Iohannis, Orban's key political
ally, seen winning re-election.
    "We continue to view this (leu) stability as being mostly
related to the electoral context and look for an upward
correction towards the end of 2019/early 2020," ING bank said.
    By 1000 GMT, the leu was 0.1% up at 4.7520 to the
euro. It has fallen 2.1% so far this year - making it central
and eastern Europe's second worst-performer - as widening
deficits and delayed policymaking took their toll.
    The zloty, which has risen to a three-month high
in recent weeks, was flat on the day at 4.2658. The Polish
central bank is one of three in the region holding an interest
rate meeting this week although markets expect rates to stay on
hold when a decision comes on Wednesday.
    The Czech crown and the Hungarian forint
each rose 0.1% to trade at 25.5120 and 329.18 respectively.
    The Czech central bank, which is one of the few banks in
Europe still debating whether to raise rates even as the global
mood turns to easing policy amid global trade tensions, meets on
Thursday and is also likely to stay on hold.
    Romania is also seen holding rates at 2.50% on Wednesday, 
    Among the region's stocks, Bucharest's blue chip index
 was flat, while Budapest eased 0.2%. Prague
and Warsaw each rose 0.2%. 

             CEE MARKETS  SNAPSHO   AT                         
                          T        1135 CET          
                          CURRENC                              
                          IES                        
                          Latest   Previous  Daily   Change
                          bid      close     change  in 2019
 Czech                    25.5200   25.5250   +0.02      +0.73%
 crown                                            %  
 Hungary                  329.290  329.4500   +0.05      -2.49%
 forint                         0                 %  
 Polish                    4.2622    4.2665   +0.10      +0.64%
 zloty                                            %  
 Romanian                  4.7528    4.7548   +0.04      -2.08%
 leu                                              %  
 Croatian                  7.4450    7.4473   +0.03      -0.47%
 kuna                                             %  
 Serbian                  117.340  117.4200   +0.07   #VALUE!
 dinar                          0                 %  
 Note:       calculated from                 1800              
 daily                                       CET     
 change                                              
                                                               
                          Latest   Previous  Daily   Change
                                   close     change  in 2019
 Prague                   1072.78  1069.690   +0.29      +8.74%
                                          0       %  
 Budapest                 42724.9  42817.55  -0.22%      +9.16%
                                7                    
 Warsaw                   2263.78   2264.06  -0.01%      -0.56%
 Bucharest                9671.09   9650.99   +0.21     +30.98%
                                                  %  
 Ljubljana                 861.98    857.83   +0.48      +7.18%
                                                  %  
 Zagreb                   1986.63   1999.43  -0.64%     +13.60%
 Belgrade                  752.00    753.78  -0.24%      -1.27%
 Sofia                     554.34    554.90  -0.10%      -6.75%
                          BONDS                                
                          Yield    Yield     Spread  Daily
                          (bid)    change    vs      change in
                                             Bund    
 Czech                                               spread
 Republic                                            
   2-year                  1.2580    0.0580   +190b       +5bps
                                                 ps  
   5-year                  1.1060    0.0400   +171b       +2bps
                                                 ps  
   10-year                 1.4390    0.0420   +176b       +1bps
                                                 ps  
 Poland                                                        
   2-year                  1.3980   -0.0150   +204b       -3bps
                                                 ps  
   5-year                  1.7560    0.0210   +236b       +1bps
                                                 ps  
   10-year                 2.0160    0.0460   +234b       +2bps
                                                 ps  
             FORWARD      RATE     AGREEMEN                    
                                   T                 
                          3x6      6x9       9x12    3M
                                                     interbank
 Czech Rep           <PR     2.22      2.20    2.12        2.17
             IBOR=>                                  
 Hungary             <BU     0.27      0.33    0.37        0.20
             BOR=>                                   
 Poland              <WI     1.73      1.71    1.68        1.71
             BOR=>                                   
 Note: FRA   are for ask prices                                
 quotes                                              
 **************************************************            
 ************                                        
    

 (Editing by Edmund Blair)
  
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