January 10, 2019 / 12:29 PM / 3 months ago

CEE MARKETS-Polish stocks retreat as rally hits resistance levels

    * Polish stocks retreat, mainly on technical factors
    * Zloty seen strengthening despite central bank row 
    * Serbian central bank keeps rates on hold, dinar gains
    * Hungarian PM opposes Germany, France; forint falls
    * 

    By Sandor Peto and Anna Koper
    BUDAPEST/WARSAW, Jan 10 (Reuters) - Warsaw led a retreat of
Central European stocks after a rally this week drove several
Polish stocks to technical resistance levels.
    The Polish and Czech stock exchange indices
retreated from three-week highs. Warsaw shed 1 percent by 1056
GMT. Budapest changed direction on the brink of record
highs, dropping 0.4 percent.
    A rally by stocks ran out of steam in other European markets
as well, as optimism over trade talks between the United States
and China receded.
    Polish markets have suffered as criticism of central bank
Governor Adam Glapinski mounted in the recent days, after a
newspaper reported that the salary of one of his aides was
unusually high.
    Glapinski, under pressure to resign, said on Wednesday that
he backed legislation that would allow for full transparency
over wages at the bank.
    The scandal may have hurt Poland's image, but it probably
did not cause the fall by Polish equities, said Pawel Bartczak,
a stock broker at Santander Bank.
    "WIG20 and the main companies have reached their resistance
levels, and they lack fuel to break them," he said, citing oil
group PKN Orlen and copper producer KGHM as examples. 
    "I think that the first to react would be PLN (zloty)," he
said. The Polish currency was steady on Thursday,
continuing to dance around 4.3 to the euro.
    Polish government bond yields tracked a retreat in U.S. and
German yields, dropping by 1 to 2 basis points, with the 10-year
bond trading at 2.82 percent.
    The forint eased by 0.1 percent to 321.38 against
the euro. 
    The Czech crown gained less than 0.1 percent to
25.617 versus the euro.
    Annual inflation in the Czech Republic was steady in
November at 2 percent, the central bank's target. The bank is
unlikely to raise interest rates at its next meeting, in
February, Erste analyst Jan Zemlicka said in a note.
     The dinar rose 0.1 percent against the euro,
after the Serbian central bank kept the region's highest
interest rates on hold.       
            CEE       SNAPSHOT   AT                         
            MARKETS             1155 CET            
                      CURRENCI                              
                      ES                            
                      Latest    Previous  Daily     Change
                      bid       close     change    in 2019
 Czech      <EURCZK=   25.6170   25.6320    +0.06%    +0.35%
 crown      >                                       
 Hungary    <EURHUF=  321.5000  321.2500    -0.08%    -0.13%
 forint     >                                       
 Polish     <EURPLN=    4.2990    4.2980    -0.02%    -0.22%
 zloty      >                                       
 Romanian   <EURRON=    4.6760    4.6749    -0.02%    -0.47%
 leu        >                                       
 Croatian   <EURHRK=    7.4260    7.4275    +0.02%    -0.22%
 kuna       >                                       
 Serbian    <EURRSD=  118.3200  118.4200    +0.08%    -0.02%
 dinar      >                                       
 Note:      calculated from               1800 CET          
 daily                                              
 change                                             
                                                            
                      Latest    Previous  Daily     Change
                                close     change    in 2019
 Prague                1016.19  1018.050    -0.18%    +3.00%
                                       0            
 Budapest             40633.50  40784.27    -0.37%    +3.82%
 Warsaw                2319.40   2341.84    -0.96%    +1.88%
 Bucharest             7410.03   7451.23    -0.55%    +0.36%
 Ljubljana  <.SBITOP    806.34    806.12    +0.03%    +0.26%
            >                                       
 Zagreb                1743.61   1741.36    +0.13%    -0.30%
 Belgrade   <.BELEX1    695.82    694.97    +0.12%    -8.65%
            5>                                      
 Sofia                  568.49    572.13    -0.64%    -4.37%
                      BONDS                                 
                      Yield     Yield     Spread    Daily
                      (bid)     change    vs Bund   change
                                                    in
 Czech                                              spread
 Republic                                           
   2-year   <CZ2YT=R    1.6780   -0.0040   +227bps     +1bps
            R>                                      
   5-year   <CZ5YT=R    1.7520    0.0000   +207bps     +1bps
            R>                                      
   10-year  <CZ10YT=    1.8470   -0.0030   +164bps     +1bps
            RR>                                     
 Poland                                                     
   2-year   <PL2YT=R    1.3860   -0.0540   +198bps     -4bps
            R>                                      
   5-year   <PL5YT=R    2.3030   -0.0060   +262bps     +1bps
            R>                                      
   10-year  <PL10YT=    2.8520    0.0050   +265bps     +2bps
            RR>                                     
            FORWARD   RATE      AGREEMEN                    
                                T                   
                      3x6       6x9       9x12      3M
                                                    interban
                                                    k
 Czech Rep                2.10      2.12      2.14      2.01
            <PRIBOR=                                
            >                                       
 Hungary                  0.32      0.49      0.72      0.13
                                                    
 Poland                   1.74      1.74      1.75      1.72
                                                    
 Note: FRA  are for ask prices                              
 quotes                                             
 *************************************************          
 *************                                      
 
 (Reporting by Sandor Peto)
  
 
 
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