August 19, 2019 / 10:16 AM / a month ago

CEE MARKETS-Stocks rise on stimulus hopes, investors await c.bank signals

    By Alan Charlish
    WARSAW, Aug 19 (Reuters) - Central European stocks and bond
yields rose on Monday, as investors eyed the prospect of fiscal
stimulus in Germany and looked ahead to a week heavy with
central bank events.
    U.S. Federal Reserve Chairman Jerome Powell is due to make a
speech on Friday at an annual meeting of central bankers in
Jackson Hole, Wyoming, while investors will also be paying
attention to minutes from the European Central Bank (ECB) and
the Fed this week.
    At 0849 GMT Polish 10-year yields were almost 10
basis points higher at 1.819%, while Czech 10-year yields were 3
basis points higher at 0.971%.
    Some analysts said bond prices may be correcting after their
rally last week was seen as overdone.
    "The market was very bullish in the last weeks. Now there is
profit taking because of the fiscal stimulus in Germany and
probably the overpriced risk of a slowdown," said ING Chief
Economist Rafal Benecki.
    The region's major stock markets were higher, with Warsaw's
WIG 20 index up 1.38% at 0854 GMT and Prague's PX index
 up 0.31%.
    Stock markets globally have been boosted by signs of
stimulus in Germany and China.
    Germany has the fiscal strength to counter any future
economic crisis "with full force", Finance Minister Olaf Scholz
said on Sunday, suggesting Berlin could make available up to 50
billion euros ($56 billion) of extra spending.
    Meanwhile, China took steps to guide interest rates for
companies lower, aiming to prop up a flagging economy.

    Currencies eased after rallying on Friday at the end of a
week that had seen the Polish zloty, the region's most
liquid currency, hitting its lowest point in over a year in an
illiquid market as local banks closed for a public holiday.
    At 0909 GMT the zloty had weakened 0.39% against the euro to
be bid at 4.3528. The Hungarian forint was 0.32%
weaker at 325.45 and the Czech crown was 0.11% weaker
at 25.756.
    "The rebound might have been too strong... we're back to the
levels from before the market stress," said Santander Bank
Polska economist Grzegorz Ogonek, talking about the zloty.

    
    
            CEE        SNAPSHOT   AT                         
            MARKETS              1118 CET            
                       CURRENCI                              
                       ES                            
                       Latest    Previous  Daily     Change
                       bid       close     change    in 2019
 Czech                  25.7710   25.7310    -0.16%    -0.25%
 crown                                               
 Hungary               325.3500  324.8000    -0.17%    -1.31%
 forint                                              
 Polish                  4.3537    4.3354    -0.42%    -1.47%
 zloty                                               
 Romanian                4.7290    4.7300    +0.02%    -1.59%
 leu                                                 
 Croatian                7.3870    7.3885    +0.02%    +0.31%
 kuna                                                
 Serbian               117.8200  117.8300    +0.01%    +0.41%
 dinar                                               
 Note:      calculated from                1800 CET          
 daily                                               
 change                                              
                                                             
                       Latest    Previous  Daily     Change
                                 close     change    in 2019
 Prague                 1036.25  1035.460    +0.08%    +5.04%
                                        0            
 Budapest              40005.90  40005.90    +0.00%    +2.22%
 Warsaw                 2094.35   2064.12    +1.46%    -8.01%
 Bucharest              9027.47   9035.27    -0.09%   +22.26%
 Ljubljana               863.79    863.18    +0.07%    +7.40%
 Zagreb                 1886.11   1882.97    +0.17%    +7.85%
 Belgrade   <.BELEX15    743.91    744.72    -0.11%    -2.33%
            >                                        
 Sofia                   572.49    575.10    -0.45%    -3.70%
                       BONDS                                 
                       Yield     Yield     Spread    Daily
                       (bid)     change    vs Bund   change
                                                     in
 Czech                                               spread
 Republic                                            
   2-year   <CZ2YT=RR    1.0730    0.0330   +197bps     +3bps
            >                                        
   5-year   <CZ5YT=RR    0.7670    0.0200   +167bps     +0bps
            >                                        
   10-year  <CZ10YT=R    0.9910    0.0540   +164bps     +2bps
            R>                                       
 Poland                                                      
   2-year   <PL2YT=RR    1.4990    0.0100   +239bps     +0bps
            >                                        
   5-year   <PL5YT=RR    1.7620    0.2840   +266bps    +27bps
            >                                        
   10-year  <PL10YT=R    2.0970    0.3760   +274bps    +34bps
            R>                                       
            FORWARD    RATE      AGREEMEN                    
                                 T                   
                       3x6       6x9       9x12      3M
                                                     interban
                                                     k
 Czech Rep          <      2.06      1.82      1.64      2.14
            PRIBOR=>                                 
 Hungary            <      0.34      0.40      0.45      0.26
            BUBOR=>                                  
 Poland             <      1.70      1.62      1.55      1.72
            WIBOR=>                                  
 Note: FRA  are for ask prices                               
 quotes                                              
 
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