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CEE MARKETS-Warsaw stocks retreat after rally despite upbeat economic figures
February 17, 2017 / 3:20 PM / in 10 months

CEE MARKETS-Warsaw stocks retreat after rally despite upbeat economic figures

    * Warsaw stocks off 18-month high on profit taking
    * Zloty also retreats despite surge in output, retail sales
    * Czech central banker sees moderate price growth

 (Adds Polish economic data, analyst comments)
    By Sandor Peto and Bartosz Chmielewski
    BUDAPEST/WARSAW, Feb 17 (Reuters) - Polish stocks retreated
on Friday and other Central European markets trod water as
investors took profits after a rally in equity markets across
the region and the world.    
    Warsaw's bluechip stock index had fallen 1.4
percent by 1435 GMT, led by PKO BP bank, which
retreated from 21-month highs and fell 1.6 percent.
    The index hit an 18-month high in the previous session when
other indices in the region were already retreating from their
highest levels since 2015, or from a record high in the case of
    Thursday's Polish rally was mainly driven by PKN Orlen
 and Lotos after Treasury Minister Henryk
Kowalczyk floated the idea of merging the two partly state-owned
    Late on Thursday, Polish news agency PAP quoted an energy
ministry statement as saying it was not analysing the potential
consolidation of refiners.
    Vestor DM analyst Beata Szparaga said a merger could still
be an option for the government even if the energy ministry was
not working on a plan.
    PKN and Lotos, after initial further gains on Friday, joined
the decline, falling 1.1 percent and 2.5 percent respectively.
    The zloty also reversed an early firming and shed
0.3 percent, leading the forint and the leu
lower, despite robust January Polish industrial output and
retail sales growth figures released during afternoon trade.
    Output growth jumped to 9 percent in annual terms and retail
sales surged 11.4 percent, while the producer price index picked
up to 4.1 percent from 3 percent in December.
    Erste group retains its forecast that the Polish central
bank is unlikely to start to lift its record low 1.5 percent
policy rate soon, analyst Katarzyna Rzentarzewska said in a
    "However, further improvement of growth outlook and
continuous upward revision of inflation and growth path can make
the MPC (Monetary Policy Council) members to reconsider its
stance in the middle of the year," she added.
    One Budapest-based dealer said the forint was also weakened
by expectations that the central bank will provide markets with
additional forint liquidity at an FX swap tender on Monday
    The Czech crown stuck to 27.02 against the euro,
just off the central bank's cap on its value at 27. Its implied
rate in forwards deals was also steady.
    Czech central bank governor Jiri Rusnok said late on
Thursday that moderate price growth in the Czech economy was
likely to continue and a suitable time would come for the
central bank to exit safely from its weak crown policy.

              CEE        SNAPSHOT   AT  1535 CET              
                         Latest    Previous  Daily    Change
                         bid       close     change   in 2017
 Czech crown              27.0200   27.0245   +0.02%    -0.05%
 Hungary                 308.4500  307.6500   -0.26%     0.12%
 Polish                    4.3285    4.3151   -0.31%     1.74%
 Romanian                  4.5250    4.5225   -0.06%     0.22%
 Croatian                  7.4400    7.4425   +0.03%     1.55%
 Serbian                 123.8100  123.9000   +0.07%    -0.37%
 Note: daily  calculate  previous  close at  1800             
 change       d from                         CET      
                         Latest    Previous  Daily    Change
                                   close     change   in 2017
 Prague                    967.61    971.08   -0.36%    +4.99%
 Budapest                33733.30  33745.02   -0.03%    +5.41%
 Warsaw                   2183.46   2215.36   -1.44%   +12.09%
 Bucharest                7716.88   7711.84   +0.07%    +8.92%
 Ljubljana                 762.63    762.89   -0.03%    +6.28%
 Zagreb                   2191.10   2180.57   +0.48%    +9.84%
 Belgrade     <.BELEX15    709.89    708.82   +0.15%    -1.04%
 Sofia                     600.38    594.18   +1.04%    +2.38%
                         Yield     Yield     Spread   Daily
                         (bid)     change    vs Bund  change
 Czech                                                spread
   2-year     <CZ2YT=RR    -0.401    -0.009   +041bp     +3bps
              >                                    s  
   5-year     <CZ5YT=RR     0.203    -0.051   +066bp     -2bps
              >                                    s  
   10-year    <CZ10YT=R     0.646    -0.054   +033bp     -2bps
              R>                                   s  
   2-year     <PL2YT=RR      2.24     0.033   +305bp     +7bps
              >                                    s  
   5-year     <PL5YT=RR     3.178     0.022   +363bp     +6bps
              >                                    s  
   10-year    <PL10YT=R      3.83    -0.004   +352bp     +3bps
              R>                                   s  
              FORWARD    RATE      AGREEMENT                  
                         3x6       6x9       9x12     3M
 Czech Rep            <      0.26      0.29     0.34         0
 Hungary              <      0.36      0.54     0.68      0.24
 Poland               <      1.78      1.81     1.92      1.73
 Note: FRA    are for                                         
 quotes       ask                                     

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