November 29, 2017 / 4:07 PM / 18 days ago

CEE MARKETS-Zloty firms on stop-loss deals, Polish stocks retreat

    * Zloty sails through 4.2 vs euro, boosted by stop-loss
deals
    * Recent robust economic figures continue to buoy zloty
    * PKN Orlen sell-off drives .WIG20 stock index to 8-day low
    * Hungarian bonds retreat, foreigners' holding drops

 (Adds fall in Polish stocks, Czech government resignation)
    By Sandor Peto and Bartosz Chmielewski
    BUDAPEST/WARSAW, Nov 29 (Reuters) - The zloty set a 5-1/2
month high against the euro on Wednesday, boosted by stop-loss
deals at the key 4.2 level, while Central European asset prices
were mixed.
    The zloty, which along with the Czech crown, is the top
performing currency in the world this year, has been
appreciating for weeks.
    Poland's recent output figures have fuelled expectations
that robust growth could tip the balance in the central bank and
lead it to hike interest rates next year.
    In early trade, the zloty rallied to 4.186. 
    BZ WBK chief dealer Mateusz Bieniek said fundamentals backed
the zloty, while political risks were limited.
    "Moreover, over the last 20 years, December has usually been
good for the zloty," he added.
    By 1521, the zloty retreated behind 4.2, trading at 4.2039.
    Warsaw's bluechip stock index led a decline of
equities in the region, shedding 1.7 percent, mainly driven by a
4.4 percent plunge of volatile PKN Orlen.
    Some U.S. investors, digesting recent news on a decline in
the oil group's refining margins, sold the shares. 
  
    The index of Warsaw-listed bank stocks retreated
from a 2-1/2 year high and shed 1.3 percent.
    Economic growth is strong across the region, but inflation
is not a concern everywhere.
    The Czech central bank has raised its interest rates twice
since August to fight inflation. Expectations for further hikes
keep the crown near 4-1/2 year highs against the euro.
    It firmed a shade to 25.485 on Wednesday. Most analysts
expect further gains.
    The outgoing centre-left Czech government resigned on
Wednesday, making way for billionaire Andrej Babis to form a
minority government next month.
    In Romania, concerns over judiciary reform, corruption and
tension between the government and the central bank remain in
the limelight, on top of worry over rising inflation.
    The bank has requested a meeting with Prime Minister Mihai
Tudose, just days after he criticised the bank for letting the
leu weaken to record lows. 
    The currency eased 0.1 percent. The forint eased
0.25 percent to 311.9.
    The latter is still off seven-month lows touched a week ago
when the National Bank of Hungary announced new programmes to
push long-term interest rates lower.
    The announcement boosted demand at a Hungarian bond auction
last Thursday, also helping the forint.
    The latest government figures, however, showed that foreign
investors did not take part in the rally and actually cut their
Hungarian bond holding as yields were falling to
record lows.
    Hungarian yields on bonds which expire in over five years
rose 3-4 basis points on Wednesday. Ten-year papers were fixed
at 2.11 percent, 27 basis points below U.S. Treasuries.     
               CEE MARKETS  SNAPSH   AT  1621 CET         
                            OT                      
                            CURRENCIES                    
                            Latest  Previo  Daily   Change
                                    us              
                            bid     close   change  in
                                                    2017
 Czech crown                25.485  25.491   +0.02   5.97%
                                 0       0       %  
 Hungary                    311.90  311.13  -0.25%  -0.99%
 forint                         00      50          
 Polish zloty               4.2039  4.2051   +0.03   4.76%
                                                 %  
 Romanian leu               4.6470  4.6408  -0.13%  -2.41%
 Croatian                   7.5450  7.5325  -0.17%   0.13%
 kuna                                               
 Serbian                    119.24  119.64   +0.34   3.45%
 dinar                          00      50       %  
 Note: daily   calculated   previo  close   1800          
 change        from         us      at      CET     
                            STOCKS                        
                            Latest  Previo  Daily   Change
                                    us              
                                    close   change  in
                                                    2017
 Prague                     1053.1  1053.8  -0.07%   +14.2
                                 4       5              7%
 Budapest                   38903.  39242.  -0.86%   +21.5
                                92      18              6%
 Warsaw                     2442.7  2485.7  -1.73%   +25.4
                                 8       1              0%
 Bucharest                  7817.4  7802.6   +0.19   +10.3
                                 5       2       %      4%
 Ljubljana                  779.46  780.54  -0.14%   +8.62
                                                         %
 Zagreb                     1860.5  1865.4  -0.27%  -6.73%
                                 2       7          
 Belgrade                   736.30  739.42  -0.42%   +2.64
                                                         %
 Sofia                      667.27  667.39  -0.02%   +13.7
                                                        9%
                            BONDS                         
                            Yield   Yield   Spread  Daily
                            (bid)   change  vs      change
                                            Bund    in
 Czech                                              spread
 Republic                                           
   2-year                    0.224  -0.038   +091b   -5bps
                                                ps  
   5-year                    0.935    0.07   +123b   +3bps
                                                ps  
   10-year                    1.76       0   +137b   -5bps
                                                ps  
 Poland                                                   
   2-year                    1.565   0.015   +225b   +0bps
                                                ps  
   5-year                    2.632   0.099   +293b   +5bps
                                                ps  
   10-year                    3.33   0.007   +294b   -4bps
                                                ps  
               FORWARD      RATE    AGREEMENT             
                            3x6     6x9     9x12    3M
                                                    interb
                                                    ank
 Czech Rep             <PR    1.03    1.21    1.35       0
               IBOR=>                               
 Hungary               <BU    0.08     0.1   0.145    0.03
               BOR=>                                
 Poland                <WI   1.774    1.83   1.928    1.73
               BOR=>                                
 Note: FRA     are for ask                                
 quotes        prices                               
 *********************************************************
 *****
 
 (Additional reporting by Luiza Ilie in Bucharest; Editing by
Elaine Hardcastle)
  
 
 

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