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CEE MARKETS-FX, stocks rebound as Asia stocks rise and euro retreats
November 16, 2017 / 10:23 AM / in a month

CEE MARKETS-FX, stocks rebound as Asia stocks rise and euro retreats

    * Profit-taking after euro rally mostly helps CEE currencies
    * Budapest leads stock rebound on MOL, upgraded by S&P
    * Leu remains under pressure from politics, overheating
fears
    * Croatia starts marketing 2030-expiry euro bonds

    By Sandor Peto
    BUDAPEST, Nov 16 (Reuters) - Central European currencies and
equities mostly firmed on Thursday on relief that the past
week's global stocks sell-off had not continued in Asia
overnight, indicating less risk aversion.
    Regional currencies were also buoyed by profit-taking on
euro buying positions built after Tuesday's upbeat economic
output data boosted the euro.
    The crown and the zloty firmed 0.3
percent against the euro by 0929 GMT. The forint
gained 0.1 percent.
    Equities mostly rebounded after Wednesday's plunge.
    Budapest's index led, rising 1.1 percent, driven by
2.5 percent rise in oil group MOL after Standard &
Poor's upgraded the company's debt rating to  'BBB-' from 'BB+'.
 
    Warsaw's bluechip index rebounded from Wednesday's
three-month lows.
    "This strengthening is simply because the recent sell-off
did not continue in Asia," one Budapest-based currency dealer
said. "Also the euro had strengthened a lot, and there is a
correction now. Markets are calming down... until the next U.S.
economic figures."
    Czech central bank (CNB) Governor Jiri Rusnok was quoted on
Thursday as saying that the economy was growing faster than
potential. The comments underpinned expectations for further CNB
rate increases, after two hikes since August.
    The region's main economies released robust third-quarter 
growth figures on Tuesday, with Czech output rising by 5 percent
in annual terms.
    The surge overshadowed concerns over politics in some
Central European countries.
    The European Commission on Wednesday voiced fresh concerns
over Poland's plans to reform its courts.
    Judicial reform, which critics say threaten the independence
of courts, is also a worry in Romania.
    Such concerns, coupled with endless corruption allegations
against ruling party officials and worries the economy may be
overheating after it grew by 8.8 percent in the third quarter,
have weighed on the leu currency and Romanian government bonds. 
    The leu eased a shade to 4.6336 against the euro,
near record lows set after the central bank said last week that
it would loosen its grip on the currency.
    Romanian government bonds took a pause after a surge in
yields in the past week to their highest levels since 2014, with
shorter maturities rising more.
    The leu could stay between 4.6 and 4.7 in the next weeks,
Nordea analyst Natalia Kornela Setlak said in a note.
    "However, we do not expect a sharp depreciation of the RON,
as the strong economic fundamentals should support the currency
to strengthen slightly in the medium-term towards the old,
well-known range 4.50-4.60 EUR/RON."
    The kuna traded slightly off nine-month highs
against the euro. Croatia opened books on a 2030-expiry
benchmark euro bond on Thursday.
    
               CEE MARKETS  SNAPSH   AT  1029 CET         
                            OT                      
                            CURRENCIES                    
                            Latest  Previo  Daily   Change
                                    us              
                            bid     close   change  in
                                                    2017
 Czech crown                25.560  25.632   +0.28   5.66%
                                 0       0       %  
 Hungary                    312.00  312.36   +0.12  -1.02%
 forint                         00      00       %  
 Polish zloty               4.2340  4.2469   +0.30   4.01%
                                                 %  
 Romanian leu               4.6336  4.6318  -0.04%  -2.13%
 Croatian                   7.5610  7.5550  -0.08%  -0.08%
 kuna                                               
 Serbian                    118.41  118.48   +0.06   4.17%
 dinar                          00      00       %  
 Note: daily   calculated   previo  close   1800          
 change        from         us      at      CET     
                            STOCKS                        
                            Latest  Previo  Daily   Change
                                    us              
                                    close   change  in
                                                    2017
 Prague                     1060.7  1052.8   +0.75   +15.1
                                 9       8       %      0%
 Budapest                   39031.  38615.   +1.08   +21.9
                                24      11       %      6%
 Warsaw                     2430.7  2418.9   +0.49   +24.7
                                 1       6       %      8%
 Bucharest                  7704.3  7731.5  -0.35%   +8.74
                                 5       4               %
 Ljubljana                  785.99  785.12   +0.11   +9.53
                                                 %       %
 Zagreb                     1848.4  1847.7   +0.04  -7.34%
                                 1       1       %  
 Belgrade                   733.58  733.48   +0.01   +2.26
                                                 %       %
 Sofia                      668.72  669.04  -0.05%   +14.0
                                                        3%
                            BONDS                         
                            Yield   Yield   Spread  Daily
                            (bid)   change  vs      change
                                            Bund    in
 Czech                                              spread
 Republic                                           
   2-year                    0.497   0.162   +124b   +16bp
                                                ps       s
   5-year                    0.956   0.144   +129b   +14bp
                                                ps       s
   10-year                   1.733  -0.008   +134b   -2bps
                                                ps  
 Poland                                                   
   2-year                    1.593  -0.008   +234b   -1bps
                                                ps  
   5-year                    2.625    0.02   +296b   +2bps
                                                ps  
   10-year                   3.454   0.016   +307b   +1bps
                                                ps  
               FORWARD      RATE    AGREEMENT             
                            3x6     6x9     9x12    3M
                                                    interb
                                                    ank
 Czech Rep             <PR    0.98    1.14    1.26       0
               IBOR=>                               
 Hungary               <BU    0.08    0.09    0.12    0.03
               BOR=>                                
 Poland                <WI  1.7625   1.835   1.935    1.73
               BOR=>                                
 Note: FRA     are for ask                                
 quotes        prices                               
 *********************************************************
 *****
 
 (Additional reporting by Luiza Ilie in Bucharest; Editing by
Catherine Evans)
  
 
 

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