July 20, 2018 / 9:40 AM / in 3 months

CEE MARKETS-Currencies rebound amid robust Hungarian wage, Polish retail data

    * U.S. dollar's retreat helps Central European currencies
    * Hungarian May wages up 10.9 pct, Polish retail sales +10.3
pct
    * Robust figures seen not changing Hungary, Poland monetary
policy
    * Refiner PKN shares up 4.3 percent on rise in Q2 earnings 

    By Sandor Peto
    BUDAPEST, July 20 (Reuters) - Central European currencies
rebounded on Friday as a dollar rally lost momentum in global
markets, while new data showed robust growth in wages in Hungary
and retail sales in Poland.
    The U.S. dollar's strengthening caused several waves
of selling in emerging markets in the past months, most recently
on Thursday.
    Central Europe's main currencies clawed back part of the
previous session's losses on Friday as the euro and the
yuan also rebounded versus the greenback.
    The forint and the zloty firmed 0.3
percent versus the euro by 0854 GMT.
    Trading at 325.9 and 4.324, respectively, they were still on
the weak side of key psychological levels at 325 and 4.3.
    The Czech crown firmed a quarter of a percent to 25.865.
    The rally of the dollar and a rise in U.S. yields have
knocked down the forint by 4.6 percent and the zloty by 3.4
percent so far this year.
    The crown has also eased by 1.25 percent even though the
Czech central bank has gradually lifted interest rates since
last August to beat back rising inflation.
    Hungary and Poland's central banks are unlikely to increase
their record-low rates any time soon, and Friday's economic
figures indicating continuing robust consumption growth will not
change their policy stance either, analysts said.
    Hungary's gross wages rose at a robust 10.9 percent annual
rate in May, even though slower than in April, when they grew by
12.6 percent.    
    The Hungarian central bank last month abandoned its earlier
guidance that rates could stay flat for years as a weakening of
the forint increased concerns about a pick-up in inflation.
    It is expected to stick to that new rhetoric at its meeting
on Tuesday, but keep interest rates on hold, analysts said.
    A rise in wages and retail sales have been similarly strong
in the region over the past few years, well exceeding the pace
of growth in the richer euro zone. 
    Polish figures released on Friday showed 10.3 percent annual
surge in retail sales.    
    Polish government bond yields rose a bit, tracking euro zone
peers, while regional stocks were mixed.
    Warsaw's blue chip index led gainers. It rose 1.2
percent, nearing a one-month high, driven by a 4.3 percent jump
in the shares of PKN Orlen after the refiner reported a
13 percent annual surge in second-quarter earnings.
    Bucharest's main index rose half a percent as the
stocks of OMV Petrom and Romgaz regained
some ground after a plunge on Thursday due to a government plan
to lower and cap natural gas prices by 2021. 
    
            CEE       SNAPSHOT   AT                         
            MARKETS             1054 CET            
                      CURRENCI                              
                      ES                            
                      Latest    Previous  Daily     Change
                      bid       close     change    in 2018
 Czech      <EURCZK=   25.8650   25.9300    +0.25%    -1.25%
 crown      >                                       
 Hungary    <EURHUF=  325.9000  326.8500    +0.29%    -4.60%
 forint     >                                       
 Polish     <EURPLN=    4.3240    4.3385    +0.34%    -3.41%
 zloty      >                                       
 Romanian   <EURRON=    4.6560    4.6556    -0.01%    +0.51%
 leu        >                                       
 Croatian   <EURHRK=    7.3930    7.4030    +0.14%    +0.50%
 kuna       >                                       
 Serbian    <EURRSD=  117.8900  117.9700    +0.07%    +0.52%
 dinar      >                                       
 Note:      calculated from               1800 CET          
 daily                                              
 change                                             
                                                            
                      Latest    Previous  Daily     Change
                                close     change    in 2018
 Prague                1083.78  1083.940    -0.01%    +0.52%
                                       0            
 Budapest             35150.57  35117.83    +0.09%   -10.73%
 Warsaw                2172.08   2146.82    +1.18%   -11.75%
 Bucharest             7903.73   7863.76    +0.51%    +1.93%
 Ljubljana  <.SBITOP    881.65    883.52    -0.21%    +9.33%
            >                                       
 Zagreb                1793.42   1795.18    -0.10%    -2.68%
 Belgrade   <.BELEX1    732.65    735.96    -0.45%    -3.57%
            5>                                      
 Sofia                  629.97    630.55    -0.09%    -7.01%
                      BONDS                                 
                      Yield     Yield     Spread    Daily
                      (bid)     change    vs Bund   change
                                                    in
 Czech                                              spread
 Republic                                           
   2-year   <CZ2YT=R    1.0610    0.0510   +170bps     +4bps
            R>                                      
   5-year   <CZ5YT=R    1.5020   -0.0080   +178bps     -1bps
            R>                                      
   10-year  <CZ10YT=    2.0860   -0.0050   +175bps     -1bps
            RR>                                     
 Poland                                                     
   2-year   <PL2YT=R    1.6200    0.0040   +225bps     -1bps
            R>                                      
   5-year   <PL5YT=R    2.4920    0.0200   +277bps     +2bps
            R>                                      
   10-year  <PL10YT=    3.1420    0.0200   +281bps     +2bps
            RR>                                     
            FORWARD   RATE      AGREEMEN                    
                                T                   
                      3x6       6x9       9x12      3M
                                                    interban
                                                    k
 Czech Rep                1.44      1.65      1.77      1.19
            <PRIBOR=                                
            >                                       
 Hungary                  0.47      0.67      0.88      0.25
                                                    
 Poland                   1.73      1.76      1.82      1.70
                                                    
 Note: FRA  are for ask prices                              
 quotes                                             
 
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