December 2, 2019 / 11:05 AM / 10 days ago

CEE MARKETS-Stocks, currencies rise on strong Chinese manufacturing

    By Joanna Plucinska
    WARSAW, Dec 2 (Reuters) - Central European stock markets largely gained,
tracking their global peers, and some regional currencies strengthened after an
upbeat China manufacturing survey offset discouraging signals in the region's PMI
results. 
    China's factory activity showed a surprising rise for November, increasing risk
appetite in Asia and Europe.
    In Central Europe, the PX index in Prague rose 0.45% and Budapest's main
index 0.40%. Poland's WIG 20 was down 0.11%. 
    Czech lender Moneta Money Bank's shares roses over 2% after it
announced late Friday it was in exclusive talks to buy the Czech building savings
and mortgage business of Germany's Wuestenrot & Wuerttembergische AG.
    Most central European currencies gained as well. 
    "I think the stronger data in China is something which should
benefit Europe and European currencies ... that's supportive for the euro bloc and
euro equivalents like the zloty," said Rafal Benecki, chief economist at ING Bank
Slaski. 
    The zloty had gained 0.3% by 1016 GMT, with a Santander note saying they expect
the momentum of the EURPLN to continue towards 4.34. The Hungarian forint also
rebounded, gaining 0.39% to 333.18 per euro, after sinking to a record low on
Thursday.  
    CIB Bank analysts said in a note no positive correction was in sight that would
lead to lasting gains for the forint.  "One of the main drivers behind the exchange
rate could continue to be expectations for a continuation of loose monetary policy,"
CIB Bank analysts said.
    HPMI data in the region mostly remained negative, following continued shrinking
in euro zone factory activity. The exception was Hungary, where the PMI rose in
November. 
    Polish manufacturing activity continued its decline, albeit at a slower pace
than the month before. New orders fell, but more slowly.
    Czech manufacturing activity saw a drop to 43.5 in November, closer to July's
10-year low of 43.1.
    In Hungary, production volumes and new orders declined but still remained above
50 points, with PMI rising to 53.0 in November.
    Bond yields also rose in the region, with 10-year yields in Poland up 5 basis
points to 2.064% and in the Czech Republic up 2.9 basis points to 1.493%. 
    "We follow the core market ... risk appetite is related to macro figures in the
euro zone  and expectations for the Fed policy meeting next week. Markets are afraid
that the Fed's rhetoric may be less dovish than expected," said Arkadiusz Urbanski,
an economist at Bank Pekao SA. 
    
                        CEE MARKETS        SNAPSHOT      AT                         
                                                        1116 CET           
                                           CURRENCIES                               
                                           Latest       Previous  Daily    Change
                                           bid          close     change   in 2019
 EURCZK=     Czech                             25.5460   25.5570   +0.04%     +0.63%
             crown                                                         
 EURHUF=     Hungary                          333.1800  334.4850   +0.39%     -3.63%
             forint                                                        
 EURPLN=     Polish                             4.3030    4.3158   +0.30%     -0.31%
             zloty                                                         
 EURRON=     Romanian                           4.7770    4.7829   +0.12%     -2.57%
             leu                                                           
 EURHRK=     Croatian                           7.4390    7.4375   -0.02%     -0.39%
             kuna                                                          
 EURRSD=     Serbian                          117.4700  117.6000   +0.11%     +0.71%
             dinar                                                         
             Note:      calculated from                           1800              
             daily                                                CET      
             change                                                        
                                                                                    
                                           Latest       Previous  Daily    Change
                                                        close     change   in 2019
 .PX         Prague                            1085.60  1080.750   +0.45%    +10.04%
                                                               0           
 .BUX        Budapest                         43878.58  43704.85   +0.40%    +12.11%
 .WIG20      Warsaw                            2156.59   2158.94   -0.11%     -5.27%
 .BETI       Bucharest                         9897.36   9886.93   +0.11%    +34.04%
 .SBITOP     Ljubljana                          898.35    896.10   +0.25%    +11.70%
 .CRBEX      Zagreb                            2002.01   1995.61   +0.32%    +14.48%
 .BELEX15    Belgrade                           771.50    770.92   +0.08%     +1.29%
 .SOFIX      Sofia                              547.41    546.57   +0.15%     -7.91%
                                           BONDS                                    
                                           Yield        Yield     Spread   Daily
                                           (bid)        change    vs Bund  change in
             Czech                                                         spread
             Republic                                                      
 CZ2YT=RR      2-year                           1.5070    0.0240   +212bp      +1bps
                                                                        s  
 CZ5YT=RR      5-year                           1.2320    0.0060   +177bp      -5bps
                                                                        s  
 CZ10YT=RR     10-year                          1.4930    0.0290   +178bp      -4bps
                                                                        s  
             Poland                                                                 
 PL2YT=RR      2-year                           1.3830   -0.0060   +200bp      -2bps
                                                                        s  
 PL5YT=RR      5-year                           1.7670    0.0210   +231bp      -3bps
                                                                        s  
 PL10YT=RR     10-year                          2.0640    0.0500   +235bp      -2bps
                                                                        s  
                        FORWARD            RATE         AGREEMEN                    
                                                        T                  
                                           3x6          6x9       9x12     3M
                                                                           interbank
             Czech Rep                            2.24      2.24     2.20       2.18
             Hungary                              0.28      0.30     0.37       0.17
             Poland                               1.73      1.70     1.66       1.71
             Note: FRA  are for ask prices                                          
             quotes                                                        
 

 (Reporting by Joanna Plucinska, Alan Charlish in Warsaw, Robert Muller and Jason
Hovet in Prague, Krisztina Than in Budapest; editing by Larry King)
  
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