July 17, 2018 / 9:57 AM / 2 months ago

CEE MARKETS-Zloty gains, Polish wages continue to surge

    * Easing dollar keeps sentiment cautiously positive
    * Polish wages up 7.5 pct y/y, second-fastest rate since
2012
    * Global mood, rather than local factors help CEE markets
    * Kuna sets 2-week high after Croatia plays World Cup final

    By Sandor Peto
    BUDAPEST, July 17 (Reuters) - The zloty rose to a one-month
high against the euro on Tuesday, while Poland reported robust
wage growth figures for June.
    Poland's data showed faster-than-expected 7.5 percent annual
growth in wages, its second-highest rate since early 2012
. A surge in wages across Central Europe has been a
key factor in accelerating inflation in the past two years.
    A rise in crude oil prices this year added to inflationary
pressure, but National Bank of Poland rate setters have not been
worried. Annual inflation running at 1.9 percent in June is well
within the bank's 1.5 to 3.5 percent target.
    Core inflation rose to 0.6 percent and a likely rise to
above 1 percent by the end of the year probably won't lead the
central bank to raise rates before the end of next year, BZ WBK
analysts said in a note. 
    The zloty rose a quarter of a percent to 4.2998
against the euro by 0904 GMT, above 4.3 to the euro for the
first time since mid-June. It traded near the 75 line against
its regional peer, the forint.
    The forint also gained against the euro, to 322.86, off
Mondays' four-week highs at 321.7.   
    Both Polish and Hungarian government bonds gained slightly.
Regional equities were mixed.
    Regional currencies and bonds benefited from improved
international sentiment rather than any local factors, one
Budapest-based trader said.
    "The forint may approach 321 or even 320 now," the trader
said.
    Elsewhere, the kuna, a less liquid currency
tightly managed by the Croatian central bank, set a two-week
high at 7.39 versus the euro. 
    In Slovenia, the main stock index fell 0.8
percent, the biggest loss of the session in the region.
    Slovenia may face early elections again as the conservative
New Slovenia (NSI) party pulled out of coalition talks late on
Monday.   
     
            CEE       SNAPSHOT   AT                         
            MARKETS             1104 CET            
                      CURRENCI                              
                      ES                            
                      Latest    Previous  Daily     Change
                      bid       close     change    in 2018
 Czech      <EURCZK=   25.8640   25.8750    +0.04%    -1.24%
 crown      >                                       
 Hungary    <EURHUF=  322.8600  323.0000    +0.04%    -3.70%
 forint     >                                       
 Polish     <EURPLN=    4.2998    4.3105    +0.25%    -2.87%
 zloty      >                                       
 Romanian   <EURRON=    4.6585    4.6590    +0.01%    +0.46%
 leu        >                                       
 Croatian   <EURHRK=    7.3915    7.3980    +0.09%    +0.52%
 kuna       >                                       
 Serbian    <EURRSD=  117.8800  118.0500    +0.14%    +0.53%
 dinar      >                                       
 Note:      calculated from               1800 CET          
 daily                                              
 change                                             
                                                            
                      Latest    Previous  Daily     Change
                                close     change    in 2018
 Prague                1087.11  1088.240    -0.10%    +0.83%
                                       0            
 Budapest             35091.82  35267.07    -0.50%   -10.88%
 Warsaw                2141.50   2133.98    +0.35%   -12.99%
 Bucharest             8019.57   7984.18    +0.44%    +3.43%
 Ljubljana  <.SBITOP    881.73    888.71    -0.79%    +9.34%
            >                                       
 Zagreb                1802.25   1802.96    -0.04%    -2.20%
 Belgrade   <.BELEX1    732.41    732.71    -0.04%    -3.60%
            5>                                      
 Sofia                  622.86    623.85    -0.16%    -8.06%
                      BONDS                                 
                      Yield     Yield     Spread    Daily
                      (bid)     change    vs Bund   change
                                                    in
 Czech                                              spread
 Republic                                           
   2-year   <CZ2YT=R    1.2280    0.1200   +186bps    +12bps
            R>                                      
   5-year   <CZ5YT=R    1.5990   -0.0280   +186bps     -3bps
            R>                                      
   10-year  <CZ10YT=    2.1490    0.0070   +179bps     +1bps
            RR>                                     
 Poland                                                     
   2-year   <PL2YT=R    1.6200   -0.0040   +225bps     -1bps
            R>                                      
   5-year   <PL5YT=R    2.4790   -0.0470   +274bps     -5bps
            R>                                      
   10-year  <PL10YT=    3.1330   -0.0370   +277bps     -3bps
            RR>                                     
            FORWARD   RATE      AGREEMEN                    
                                T                   
                      3x6       6x9       9x12      3M
                                                    interban
                                                    k
 Czech Rep                1.44      1.65      1.77      1.19
            <PRIBOR=                                
            >                                       
 Hungary                  0.53      0.74      0.99      0.26
                                                    
 Poland                   1.74      1.77      1.80      1.70
                                                    
 Note: FRA  are for ask prices                              
 quotes                                             
 *************************************************          
 *************                                      
 
 (Additional reporting by Igor Ilic in Zagreb, editing by Larry
King)
  
 
 
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