August 3, 2018 / 9:44 AM / 3 months ago

CEE MARKETS-Crown eases despite rate hike; oil group MOL shares outperform

    By Krisztina  Than
    BUDAPEST, Aug 3 (Reuters) - The crown retreated on Friday
along with other Central European currencies, even though the
Czech central bank raised interest rates on Thursday, as
emerging markets suffered amid the Turkish lira's plunge.
    Hungarian oil and gas group MOL shares jumped by 2
 percent after the company improved its outlook for 2018,
helping to lift the Budapest stock market by 1 percent by 0900
GMT. Budapest outperformed the rest of the region, where shares
were only modestly higher.
    The Czech central bank raised its benchmark interest rate on
Thursday, the third increase this year, as it tries to corral
inflation and compensate for a weak currency.
    However, the bank's outlook showed rates remaining stable
next year, leaving many in the market disappointed, some traders
said. 
    "It's the 2019 no-hikes that surprised a bit, seeing the
next move in early 2020 – all that caused by expectations for a
much stronger currency next year, to effectively deliver
monetary tightening," Komercni Banka rates trader Dalimil
Vyskovsky said in a note.
    The bank raised its benchmark rate by 25 basis points to
1.25 percent, its fifth increase since last August. But the
crown shed 0.2 percent by 0900 GMT to trade at 25.70. The zloty
 lost 0.1 percent while the forint was flat,
stuck between 321 and 322 to the euro.
    "Emerging market currencies were hit yesterday due to a
general risk-aversion in markets and sanctions introduced by the
United States against Turkey," brokerage Equilor said in a note.
    Equilor analysts said emerging-market currencies could
remain under pressure from a dispute between Turkey and the U.S.
The lira fell to record lows after Washington imposed
sanctions on two of President Tayyip Erdogan's ministers
.
    Despite the weakening, Central Europe's currencies remained
near multi-week highs reached in recent days, after investors
closed some of the selling positions opened in the past months
when the dollar rallied in global markets.
    Hungary's MOL shares led a rise on the Budapest Stock
Exchange after the company announced it raised its 2018 EBITDA
target to around $2.4 bln from $2.2 bln. The stock
surged 2 percent by 0917 GMT to 2,758 forints  ($9.95).
    The other main Hungarian blue-chip, OTP Bank, also
jumped by one percent to 10,530 forints after the company
reported earlier in the week that it signed a deal to buy
Societe Generale's Bulgarian and Albanian units.

            CEE        SNAPSHOT   AT                         
            MARKETS              1059 CET            
                       CURRENCI                              
                       ES                            
                       Latest    Previous  Daily     Change
                       bid       close     change    in 2018
 Czech                  25.7000   25.6600    -0.16%    -0.61%
 crown                                               
 Hungary               321.2000  321.1450    -0.02%    -3.20%
 forint                                              
 Polish                  4.2772    4.2722    -0.12%    -2.36%
 zloty                                               
 Romanian                4.6200    4.6217    +0.04%    +1.29%
 leu                                                 
 Croatian                7.4060    7.4075    +0.02%    +0.33%
 kuna                                                
 Serbian               117.8600  118.0200    +0.14%    +0.54%
 dinar                                               
 Note:      calculated from                1800 CET          
 daily                                               
 change                                              
                                                             
                       Latest    Previous  Daily     Change
                                 close     change    in 2018
 Prague                 1090.86  1089.090    +0.16%    +1.18%
                                        0            
 Budapest              36411.98  36035.46    +1.04%    -7.53%
 Warsaw                 2284.97   2283.94    +0.05%    -7.16%
 Bucharest              8006.01   7994.11    +0.15%    +3.25%
 Ljubljana               889.53    888.43    +0.12%   +10.31%
 Zagreb                 1819.25   1818.34    +0.05%    -1.28%
 Belgrade   <.BELEX15    743.29    742.00    +0.17%    -2.17%
            >                                        
 Sofia                   639.15    639.31    -0.03%    -5.65%
                       BONDS                                 
                       Yield     Yield     Spread    Daily
                       (bid)     change    vs Bund   change
                                                     in
 Czech                                               spread
 Republic                                            
   2-year   <CZ2YT=RR    1.2690   -0.0120   +187bps     +2bps
            >                                        
   5-year   <CZ5YT=RR    1.7970    0.0790   +201bps    +11bps
            >                                        
   10-year  <CZ10YT=R    2.2240    0.0110   +180bps     +5bps
            R>                                       
 Poland                                                      
   2-year   <PL2YT=RR    1.6000   -0.0110   +220bps     +2bps
            >                                        
   5-year   <PL5YT=RR    2.5040   -0.0030   +271bps     +3bps
            >                                        
   10-year  <PL10YT=R    3.1300   -0.0340   +271bps     +0bps
            R>                                       
            FORWARD    RATE      AGREEMEN                    
                                 T                   
                       3x6       6x9       9x12      3M
                                                     interban
                                                     k
 Czech Rep          <      1.44      1.65      1.77  #N/A
            PRIBOR=>                                 
 Hungary            <      0.38      0.58      0.78      0.00
            BUBOR=>                                  
 Poland             <      1.73      1.75      1.80      1.70
            WIBOR=>                                  
 Note: FRA  are for ask prices                               
 quotes                                              
 
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