March 6, 2018 / 3:31 PM / 9 months ago

CEE MARKETS-Budapest leads rebound in shares and currencies

    * CEE equities jump as risk appetite returns in global
markets
    * Budapest leads stocks rebound in "discount buying"
-analyst
    * Zloty rebounds after initial weakening
    * Poland's CPI forecasts seen showing little price pressure

 (Recasts on rise for stocks and currencies)
    By Sandor Peto and Marcin Goettig
    BUDAPEST/WARSAW, March 6 (Reuters) - Budapest led a rebound
of Central Europe's main equities markets on Tuesday, which also
lifted regional currencies, as risk appetite returned in global
markets, dealers said.
     Investors were picking stocks that became cheap after weeks
of falls on global factors including fears of a rise in
inflation.
     Sentiment improved on Tuesday as the risk of a trade war
between the United States and its partners decreased and hopes
that tension between the United States and North Korea will
ease.
     Budapest's main stock index rose 2.1 percent by 1452
GMT, outperforming the region and the main Western European
stock exchanges.
     The four most valuable companies on the Budapest bourse all
rose, after registering heavy losses in recent weeks, led by
pharmaceuticals company Richter, up almost 4 percent.
    "To sum up, this is discount buying," said Balint Kovacs,
analyst at broker Equilor.
    The breakdown of Hungary's fourth-quarter economic output
data showed that a surge in household consumption and
investments continue to boost growth, even though a pick-up in
imports could narrow the country's hefty trade surplus.

    The main regional currencies tracked the strength in
equities markets.
    The forint gained 0.35 percent against the euro
while the Czech crown firmed by 0.1 percent.
    The Polish zloty also strengthened, rising 0.2 percent to
4.1823 against the euro, reversing an early decline towards its
weakest levels this year beyond the 4.2 line.
    It had eased initially on expectations that the Polish
central bank will keep rates on hold at its meeting on Wednesday
and forecast moderate inflation.
    "The latest inflation projection may surprise with its
dovish tone, which could exert some pressure on the zloty," BZ
WBK analysts said in a note before the currency's rebound.
    Serbia's dinar bucked the regional rise, shedding
0.1 percent against the euro.
    The central bank, which has repeatedly intervened in the
market to stem the dinar's strength, is expected to keep its
benchmark rate on hold at its meeting on Thursday.
    
            CEE       SNAPSHOT   AT                         
            MARKETS             1552 CET            
                      CURRENCI                              
                      ES                            
                      Latest    Previous  Daily     Change
                      bid       close     change    in 2018
 Czech      <EURCZK=   25.3950   25.4300    +0.14%    +0.58%
 crown      >                                       
 Hungary    <EURHUF=  313.0500  314.1500    +0.35%    -0.68%
 forint     >                                       
 Polish     <EURPLN=    4.1823    4.1899    +0.18%    -0.14%
 zloty      >                                       
 Romanian   <EURRON=    4.6595    4.6605    +0.02%    +0.43%
 leu        >                                       
 Croatian   <EURHRK=    7.4260    7.4335    +0.10%    +0.06%
 kuna       >                                       
 Serbian    <EURRSD=  118.0700  117.9900    -0.07%    +0.36%
 dinar      >                                       
 Note:      calculated from               1800 CET          
 daily                                              
 change                                             
                                                            
                      Latest    Previous  Daily     Change
                                close     change    in 2018
 Prague                1123.48  1113.160    +0.93%    +4.20%
                                       0            
 Budapest             37886.11  37119.66    +2.06%    -3.79%
 Warsaw                2336.87   2330.10    +0.29%    -5.05%
 Bucharest             8417.54   8384.01    +0.40%    +8.56%
 Ljubljana  <.SBITOP    810.46    807.02    +0.43%    +0.51%
            >                                       
 Zagreb                1846.50   1850.65    -0.22%    +0.20%
 Belgrade   <.BELEX1    748.01    751.50    -0.46%    -1.55%
            5>                                      
 Sofia                  681.99    683.12    -0.17%    +0.67%
                      BONDS                                 
                      Yield     Yield     Spread    Daily
                      (bid)     change    vs Bund   change
                                                    in
 Czech                                              spread
 Republic                                           
   2-year   <CZ2YT=R    0.8460    0.0430   +137bps     +4bps
            R>                                      
   5-year   <CZ5YT=R    1.2870    0.0210   +124bps     -2bps
            R>                                      
   10-year  <CZ10YT=    1.9680    0.0620   +129bps     +2bps
            RR>                                     
 Poland                                                     
   2-year   <PL2YT=R    1.6050   -0.0520   +213bps     -6bps
            R>                                      
   5-year   <PL5YT=R    2.5760    0.0180   +253bps     -2bps
            R>                                      
   10-year  <PL10YT=    3.3380    0.0160   +266bps     -3bps
            RR>                                     
            FORWARD   RATE      AGREEMEN                    
                                T                   
                      3x6       6x9       9x12      3M
                                                    interban
                                                    k
 Czech Rep                0.97      1.09      1.24      0.91
            <PRIBOR=                                
            >                                       
 Hungary                  0.08      0.11      0.19      0.02
                                                    
 Poland                   1.76      1.78      1.86      1.72
                                                    
 Note: FRA  are for ask prices                              
 quotes                                             
 
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