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CEE MARKETS-Oil stocks fall, no lift for currencies from hawkish hints
November 15, 2017 / 10:37 AM / in a month

CEE MARKETS-Oil stocks fall, no lift for currencies from hawkish hints

    * Oil, energy stocks follow global decline, push down
indices
    * Euro strength puts lid on currencies, crown at 12-day low
    * Czech rate setter Hampl, Polish Hardt hint at rate hike
    * Romanian government bonds take a pause after yield surge

    By Sandor Peto
    BUDAPEST, Nov 15 (Reuters) - Energy, crude and metals sector
stocks knocked Central European equities lower on Wednesday
after a continuing decline in crude prices caused
similar movements in Wall Street and elsewhere in the world.
    Warsaw's bluechip index led the decline, shedding
0.6 percent by 0933 GMT.
    It was led lower by copper producer KGHM, which
sank 5 percent after cutting its 2017 investment and output
goals, while oil group PKN Orlen fell 1.7 percent.   
    Global weakness in equities has weighed on stocks across the
region this week even though a batch of third-quarter data early
on Tuesday showed robust economic growth in Central Europe.
    Regional currencies have also not benefited from the figures
because a surge in German output has triggered euro buying.
    Hawkish comments from a Polish and a Czech central banker,
quoted by local papers on Wednesday, had no effect either.
    Czech central bank (CNB) Vice-Governor Mojmir Hampl said he
may vote for a 25 basis point interest rate hike at the next
policy meeting on Dec. 21. That would be the third hike since
August when the bank started to reverse years of easing.

    The Czech crown eased a quarter of a percentage
point against the euro to 25.695 despite the comments.
    Keeping rate hike expectations alive is a key tool of the
CNB to buoy the crown, whose strength helps it fight inflation
which has exceeded its 2 percent target.
    The zloty eased even though Polish rate setter
Lukasz Hardt was quoted by the daily Rzeczpospolita as saying he
may consider a small rate hike early next year if inflation is
still heading towards the bank's 2.5 percent target.

    Polish government bonds tracked a retreat in yields in the
main developed markets, with the 10-year yield dropping 3 basis
points to 3.416 percent.
    Romania's corresponding yield was 4.62 percent, flat after a
recent surge in the country's yields to their highest levels
since 2014. The leu firmed 0.1 percent to 4.636 versus
the euro.
    Tuesday's data showed Romania growing faster in the third
quarter than any of its central European peers, at 8.8 percent.
That figure and higher-than expected inflation data have
underlined fears that the economy is overheating.
    "Some market watchers may see the rising pressure on the
regulator (Romanian central bank) to deliver a faster policy
response (monetary tightening) amid the increased risk of
falling 'behind the curve'," Raiffeisen analyst Gintaras
Shlizhyus said in a note.    
               CEE MARKETS  SNAPSH   AT  1033 CET         
                            OT                      
                            CURRENCIES                    
                            Latest  Previo  Daily   Change
                                    us              
                            bid     close   change  in
                                                    2017
 Czech crown                25.695  25.629  -0.25%   5.11%
                                 0       5          
 Hungary                    311.80  311.76  -0.01%  -0.96%
 forint                         00      50          
 Polish zloty               4.2495  4.2482  -0.03%   3.63%
 Romanian leu               4.6360  4.6417   +0.12  -2.18%
                                                 %  
 Croatian                   7.5505  7.5533   +0.04   0.06%
 kuna                                            %  
 Serbian                    118.43  118.54   +0.09   4.15%
 dinar                          00      00       %  
 Note: daily   calculated   previo  close   1800          
 change        from         us      at      CET     
                            STOCKS                        
                            Latest  Previo  Daily   Change
                                    us              
                                    close   change  in
                                                    2017
 Prague                     1060.1  1062.4  -0.21%   +15.0
                                 9       5              4%
 Budapest                   39020.  39140.  -0.31%   +21.9
                                91      44              3%
 Warsaw                     2448.7  2464.3  -0.63%   +25.7
                                 9       5              1%
 Bucharest                  7798.8  7804.7  -0.08%   +10.0
                                 4       3              7%
 Ljubljana                  786.38  789.08  -0.34%   +9.59
                                                         %
 Zagreb                     1843.1  1842.6   +0.03  -7.60%
                                 6       3       %  
 Belgrade                   738.51  739.05  -0.07%   +2.95
                                                         %
 Sofia                      671.57  670.66   +0.14   +14.5
                                                 %      2%
                            BONDS                         
                            Yield   Yield   Spread  Daily
                            (bid)   change  vs      change
                                            Bund    in
 Czech                                              spread
 Republic                                           
   2-year                    0.473   0.141   +123b   +15bp
                                                ps       s
   5-year                    0.917   0.092   +127b   +11bp
                                                ps       s
   10-year                   1.713  -0.033   +134b   -1bps
                                                ps  
 Poland                                                   
   2-year                    1.593  -0.004   +235b   +1bps
                                                ps  
   5-year                    2.585  -0.036   +294b   -2bps
                                                ps  
   10-year                   3.425  -0.032   +305b   -1bps
                                                ps  
               FORWARD      RATE    AGREEMENT             
                            3x6     6x9     9x12    3M
                                                    interb
                                                    ank
 Czech Rep             <PR    0.95    1.11    1.22       0
               IBOR=>                               
 Hungary               <BU    0.03     0.1    0.15    0.03
               BOR=>                                
 Poland                <WI   1.775   1.805   1.915    1.73
               BOR=>                                
 Note: FRA     are for ask                                
 quotes        prices                               
 

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