January 9, 2020 / 11:38 AM / in a month

CEE MARKETS-Currencies give up previous day's gains

    WARSAW, Jan 9 (Reuters) - Central European currencies on
Thursday gave up gains from Wednesday when U.S. President Donald
Trump had eased tensions by stepping back from further military
action Iran.
    Trump tempered days of angry rhetoric and suggested Iran was
"standing down" after it fired missiles at U.S. forces in Iraq.

    In early trade, the region's main currencies retreated to
Wednesday afternoon's levels. At 1012 GMT, the Polish zloty
 was down 0.29% against the euro at 4.2436. The Czech
crown had shed 0.14% to be bid at 23.25 and the
Hungarian forint fell 0.31% to 331.56.
    "Likely it is just some kind of quick moves, there was a
rebound yesterday, maybe it's just a correction to that," said
Peter Virovacz, senior economist, Hungary at ING.
    "Yesterday was quite positive after we realised there won't
be a full blown war between Iran and the U.S."
    Stock markets, however, continued to rise as equities got a
boost from the easing tensions in the Middle East. Warsaw's WIG
20 was up  1.56%, while Prague's PX index gained
0.33% and Budapest's main index strengthened 0.65%.
    In Budapest, OTP shares outperformed the wider
Budapest market, rising 1.2%. OTP said on Wednesday that it was
planning further expansion in Slovenia, and in new countries
after buying the regional unit of France's Societe Generale
 last year.
    In Romania, the leu was little changed at 4.7749
against the euro after the central bank left its benchmark
interest rate unchanged at 2.50% as expected on
Wednesday, maintaining a cautious stance in the face of fiscal
uncertainty and inflation risks ahead of two elections this
year.
    Poland's central bank also left its benchmark interest rate
unchanged at 1.5%, with central bank governor Adam Glapinski
saying that a surprisingly high December flash CPI reading did
not change his view that rates may stay on hold until his term
ends in 2022.
    Poland's December flash CPI surprised economists on Tuesday,
with a reading of 3.4% coming in well above the 2.9% expected by
analysts in a Reuters poll and marking the highest level of
inflation in central Europe's largest economy since 2012.
    Polish 10-year yields continued to rise, up 6.8
basis points on the day at 2.278% ahead of a bond auction worth
3-5 billion zlotys. Czech 10-year yields were up 1.4
basis points at 1.629%.
    
                       CEE MARKETS       SNAPSHOT     AT  1137                    
                                                     CET                 
                                         CURRENCIES                               
                                         Latest      Previous   Daily    Change
                                         bid         close      change   in 2020
 EURCZK=    Czech                           25.2410    25.2375   -0.01%     +0.76%
            crown                                                        
 EURHUF=    Hungary                        332.1500   330.9850   -0.35%     -0.30%
            forint                                                       
 EURPLN=    Polish                           4.2450     4.2389   -0.14%     +0.27%
            zloty                                                        
 EURRON=    Romanian                         4.7775     4.7761   -0.03%     +0.23%
            leu                                                          
 EURHRK=    Croatian                         7.4470     7.4490   +0.03%     -0.02%
            kuna                                                         
 EURRSD=    Serbian                        117.5200   117.5600   +0.03%     +0.04%
            dinar                                                        
            Note:      calculated from                          1800              
            daily                                               CET      
            change                                                       
                                                                                  
                                         Latest      Previous   Daily    Change
                                                     close      change   in 2020
 .PX        Prague                          1121.89  1118.2200   +0.33%     +0.56%
 .BUX       Budapest                       45154.22   44932.18   +0.49%     -2.02%
 .WIG20     Warsaw                          2150.08    2115.99   +1.61%     -0.00%
 .BETI      Bucharest                       9924.82    9856.93   +0.69%     -0.53%
 .SBITOP    Ljubljana                        940.25     937.81   +0.26%     +1.55%
 .CRBEX     Zagreb                          2026.97    2024.81   +0.11%     +0.47%
 .BELEX15   Belgrade                         793.35     798.18   -0.61%     -1.04%
 .SOFIX     Sofia                            575.98     575.75   +0.04%     +1.38%
                                         BONDS                                    
                                         Yield       Yield      Spread   Daily
                                         (bid)       change     vs Bund  change in
            Czech                                                        spread
            Republic                                                     
 CZ2YT=RR     2-year                         1.7810     0.1060   +239bp     +12bps
                                                                      s  
 CZ5YT=RR     5-year                         1.4330    -0.0580   +194bp      -7bps
                                                                      s  
 CZ10YT=RR    10-year                        1.6290     0.0140   +187bp      -1bps
                                                                      s  
            Poland                                                                
 PL2YT=RR     2-year                         1.5380     0.0020   +215bp      +1bps
                                                                      s  
 PL5YT=RR     5-year                         1.9290     0.0320   +244bp      +2bps
                                                                      s  
 PL10YT=RR    10-year                        2.2560     0.0460   +249bp      +3bps
                                                                      s  
                       FORWARD           RATE        AGREEMENT                    
                                         3x6         6x9        9x12     3M
                                                                         interbank
            Czech Rep          <PRIBOR=        2.25       2.26     2.26       2.17
                       >                                                 
            Hungary                            0.26       0.34     0.42       0.16
            Poland                             1.75       1.77     1.79       1.71
            Note: FRA  are for ask prices                                         
            quotes                                                       
    
    

 
    
    

 (Reporting by Alan Charlish in Warsaw, jason Hovet in Prague
and Krisztina Than in Budapest; Editing by Maju Samuel)
  
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