* Global risk aversion weighs on CEE currencies, stocks
* Some market participants see Czech rate hike Wednesday
* Hungary's forint, bonds stabilise after weakening
By Sandor Peto and Jason Hovet
BUDAPEST/PRAGUE, June 25 (Reuters) - Central Europe's main
currencies and equities mostly eased in slow trade on Monday as
trade tension between the United States and its partners weighed
on risk appetite in global markets.
The crown eased less than 0.1 percent to 25.82
against the euro by 0831 GMT, two days before a meeting of the
Czech central bank (CNB) at which interest rates may be raised.
The bank started to reverse years of monetary easing in
August last year as a surge in wages due to tight labour markets
has increased inflation in the region.
But Czech consumer sentiment eased slightly in June
according to data released on Monday. The Ifo
business climate index of Germany, Central Europe's biggest
trade partner, also eased in June.
A rally of the dollar and U.S. yields in the past months has
led to a weakening of regional currencies, including the crown,
increasing the odds of further hikes in CNB rates.
"Rate setters definitely dislike the current, rather weak
koruna (crown)," Erste analysts said in a note, adding however
that a hike in August is more likely than at the bank's next
meeting on Wednesday.
Markets are still split on the chances that the next hike
could come already at Wednesday's meeting, where hawkish rate
setter Mojmir Hampl will not be present.
"Even with the biggest of the (hawks on the board) ...
missing, we believe the hawkish wing will win and rates will go
up by 25 bps," CSOB analysts said in a client note, noting the
crown is around 3 percent weaker than the CNB outlook assumed.
The bank's benchmark rate stands at 0.75 percent.
Elsewhere in the region, Hungary's central bank signalled an
eventual end to its ultra-loose policies last week after a surge
in its long-term bond yields and a weakening of the forint
. The forint traded steady at 324.73 against the euro.
"We project a bit more stability and see some modest yield
tightening possible on long-end HGBs (Hungarian government
bonds) if global risk aversion is tamed this week," Raiffeisen
analysts said in a note.
Hungarian bonds were steady, while regional peers were
mixed.
Romanian bond yields were bid higher by a few basis points.
Political wrangling over corruption in Romania may even help
government bonds as it could make the country's central bank
more cautious in monetary tightening, the Raiffeisen note said.
Senior members of the ruling Social Democrats expressed
undimmed support for their leader on Friday after a preliminary
Supreme Court ruling sentenced the country's most powerful
politician to prison for corruption.
Bucharest's main equities index fell by over one
percent, dragged down by a 12 percent fall in the stock of
state-owned gas pipeline operator Transgaz, which
started to trade without dividend.
CEE MARKETS SNAPSH AT 1031 CET
OT
CURRENCIES
Latest Previo Daily Change
us
bid close change in
2018
Czech crown 25.820 25.806 -0.05% -1.13%
0 5
Hungary 324.73 324.70 -0.01% -4.37%
forint 00 50
Polish zloty 4.3200 4.3181 -0.04% -3.34%
Romanian leu 4.6644 4.6628 -0.03% 0.27%
Croatian 7.3770 7.3795 +0.03 0.69%
kuna %
Serbian 118.00 118.08 +0.07 0.34%
dinar 00 00 %
Note: daily calculated previo close 1800
change from us at CET
STOCKS
Latest Previo Daily Change
us
close change in
2018
Prague 1068.2 1064.1 +0.39 -0.92%
2 2 %
Budapest 35141. 35396. -0.72% -10.76
33 62 %
Warsaw 2171.2 2162.8 +0.39 -11.78
6 8 % %
Bucharest 8024.7 8108.8 -1.04% +3.49
3 4 %
Ljubljana 0.00 886.75 +0.00 -100.0
% 0%
Zagreb 1838.5 1831.8 +0.37 -0.24%
1 2 %
Belgrade 732.30 729.87 +0.33 -3.62%
%
Sofia 634.31 630.81 +0.55 -6.37%
%
BONDS
Yield Yield Spread Daily
(bid) change vs change
Bund in
Czech spread
Republic
2-year 1.072 0.006 +176b +0bps
ps
5-year 1.594 -0.003 +190b +0bps
ps
10-year 2.203 -0.012 +188b +0bps
ps
Poland
2-year 1.644 0.014 +234b +1bps
ps
5-year 2.512 0.003 +282b +1bps
ps
10-year 3.175 0.034 +285b +4bps
ps
FORWARD RATE AGREEMENT
3x6 6x9 9x12 3M
interb
ank
Czech Rep <PR 1.17 1.29 1.43 #N/A
IBOR=>
Hungary <BU 0.77 0.965 1.16 0.26
BOR=>
Poland <WI 1.75 1.76 1.81 1.7
BOR=>
Note: FRA are for ask
quotes prices
