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CEE MARKETS-Stocks, currencies rebound; Czech central bank talks up crown
August 30, 2017 / 10:00 AM / 21 days ago

CEE MARKETS-Stocks, currencies rebound; Czech central bank talks up crown

    * Stocks, currencies mostly rise as nerves over N. Korea
ease
    * Hawkish CNB comments help lift crown to 2-week high vs
euro
    * Forint bucks the rise on recent dovish central bank
comments
    * Hungary's record-low jobless rate underpins robust GDP
outlook

    By Sandor Peto
    BUDAPEST, Aug 30 (Reuters) - Central European stocks and
currencies rebounded on Wednesday, tracking core European
markets as caution eased somewhat in the wake of North Korea's
latest missile test, and also helped by hawkish Czech central
bank comments.
    Economic optimism in the Czech Republic has boosted mortgage
lending to levels which are already worrying the central bank
(CNB), which early this month became the first in the EU to
raise interest rates since 2012.
    One of its rate setters, Marek Mora, was quoted as saying on
Wednesday that the bank may have room to lift interest rates
further this year.
    CNB Vice-Governor Mojmir Hampl said on Tuesday that he might
vote for another rate hike at the bank's Sept. 27 board meeting.

    The Czech crown firmed to a two-week high, gaining
0.2 percent against the euro, to 26.05. 
    Regional stocks and currencies generally rose as a bout of
risk aversion in global markets waned in the wake of North
Korea's missile test.
    News about the test weakened stocks and lifted government
bonds globally in the previous session and caused some weakness
in the region's currencies. All those movements were reversed on
Wednesday.
    "Seesawing. No news," one Budapest-based trader said, adding
that government bond yields rose by 4-5 basis points without any
significant selling.
    Prague led stock gains, with its main index rising 0.8
percent by 0844 GMT. Budapest and Warsaw gained
0.6 percent.   
    While the zloty firmed 0.1 percent to 4.262
against the euro, the forint bucked the trend and
touched six-week lows.
    It is still under pressure from last week's dovish comments
from the Hungarian central bank (NBH), which market participants
interpreted as verbal intervention to stem a strengthening.
    Regional assets have recently been buoyed by economic data
showing robust growth, partly supported by recovery in the euro
zone and no signals from the European Central Bank about ending
its stimulus policies.
    The Hungarian central bank even flagged further monetary
easing through its unconventional tools last week, knocking down
the forint from 28-month highs at 301.72 versus the euro.
    It traded at 306.02 at 0844 GMT, down 0.1 percent from
Tuesday's close.
    It eased even though fresh figures showed a fall in
Hungary's unemployment rate to a record low 4.2 percent in the
May-July period, which confirmed that the labour market remains
tight, fuelling robust wage rises and consumption.
    Consumption has been a key component of growth in the
European Union's eastern members which have been driven to lift
wages after millions of workers moved to richer Western
countries.
    The stocks of LPP rose 0.8 percent after the
Polish clothing retail company reported a jump in second-quarter
sales and net profits.
    
               CEE MARKETS  SNAPSH   AT  1044 CET         
                            OT                      
                            CURRENCIES                    
                            Latest  Previo  Daily   Change
                                    us              
                            bid     close   change  in
                                                    2017
 Czech crown                26.050  26.100   +0.19   3.67%
                                 0       0       %  
 Hungary                    306.02  305.82  -0.07%   0.91%
 forint                         00      00          
 Polish zloty               4.2620  4.2670   +0.12   3.33%
                                                 %  
 Romanian leu               4.5920  4.5955   +0.08  -1.24%
                                                 %  
 Croatian                   7.4100  7.4130   +0.04   1.96%
 kuna                                            %  
 Serbian                    118.99  119.19   +0.17   3.66%
 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                     1029.4  1021.3   +0.80   +11.7
                                 2       0       %      0%
 Budapest                   37872.  37639.   +0.62   +18.3
                                62      62       %      4%
 Warsaw                     2512.8  2497.5   +0.61   +29.0
                                 3       8       %      0%
 Bucharest                  8333.9  8307.5   +0.32   +17.6
                                 3       3       %      3%
 Ljubljana                  822.84  819.61   +0.39   +14.6
                                                 %      7%
 Zagreb                     1897.8  1895.6   +0.12  -4.86%
                                 9       9       %  
 Belgrade                   727.32  728.49  -0.16%   +1.39
                                                         %
 Sofia                      706.43  711.13  -0.66%   +20.4
                                                        6%
                            BONDS                         
                            Yield   Yield   Spread  Daily
                            (bid)   change  vs      change
                                            Bund    in
 Czech                                              spread
 Republic                                           
   2-year                   -0.053  -0.027   +070b   -2bps
                                                ps  
   5-year                    0.046   0.036   +039b   +3bps
                                                ps  
   10-year                   0.916   0.012   +056b   -1bps
                                                ps  
 Poland                                                   
   2-year                    1.676  -0.003   +243b   +0bps
                                                ps  
   5-year                    2.602   0.006   +295b   +0bps
                                                ps  
   10-year                    3.29   0.024   +294b   +1bps
                                                ps  
               FORWARD      RATE    AGREEMENT             
                            3x6     6x9     9x12    3M
                                                    interb
                                                    ank
 Czech Rep             <PR     0.6     0.7     0.8       0
               IBOR=>                               
 Hungary               <BU     0.2    0.24    0.28    0.15
               BOR=>                                
 Poland                <WI   1.785   1.779    1.82    1.73
               BOR=>                                
 Note: FRA     are for ask                                
 quotes        prices                               
 *********************************************************
 *****
 

 (Reporting by Sandor Peto; Editing by Hugh Lawson)
  
 
 

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