August 15, 2019 / 8:58 AM / 2 months ago

CEE MARKETS-Markets steady after falls, sentiment still shaky

    BUDAPEST, Aug 15 (Reuters) - Central European currencies and
stocks steadied on Thursday after falls in the previous session
in negative global investor sentiment and on data signalling a
slowdown in the eastern region's fast-growing economies.
    Polish, Romanian and Croatian markets were closed on
Thursday for national holidays.
    "The Hungarian stock market closed yesterday'a session with
a significant drop, and even though we could see some positive
correction this morning we expect a decline in the longer term,"
brokerage Equilor said in a note.
    Signs of Central European economies starting to cool added
to negative market sentiment across the region, which has
worsened this month amid growing global trade fears.
    The Hungarian forint is expected to continue trading in a
range between 323 and 326 to the euro, with investors focusing
on Friday when two rating agencies -- Fitch and Standard and
Poor's -- are expected to review Hungary's credit rating,
analysts said.
    At 0800 GMT the forint was flat at 325.52 versus
the euro.
    The Polish zloty fell to a 13-month low on
Wednesday.
    "The zloty has been under significant pressure over the past
few weeks, driven in part by sharp declines in the Polish
banking equity index," Morgan Stanley said in a note. 
    "The slowdown in Germany is also having some impact, with
Polish GDP slowing in 2Q this year."
    The Polish economy expanded 4.4% year-on-year in the second
quarter, down from 4.7% in the previous quarter.
    Analysts, though, expect Poland and Hungary - where
second-quarter growth eased to 4.9% from a 15-year high of 5.3%
- to slow in the coming quarters and next year as the eurozone
-- and thus Germany -- slows. 
    Hungary expects to introduce two more economic stimulus
programs next year as growth slows in the European Union, its
main trading partner, Prime Minister Viktor Orban said late last
month.
    Orban's economic policy has focused on maintaining an
economic growth rate exceeding the EU average by 2 percentage
points. In June, the government announced a first batch of
measures, including tax cuts, to boost job creation.
            CEE        SNAPSHOT   AT                         
            MARKETS              1002 CET            
                       CURRENCI                              
                       ES                            
                       Latest    Previous  Daily     Change
                       bid       close     change    in 2019
 Czech                  25.9000   25.8700    -0.12%    -0.75%
 crown                                               
 Hungary               325.5200  325.6300    +0.03%    -1.36%
 forint                                              
 Polish                  4.3769    4.3745    -0.05%    -1.99%
 zloty                                               
 Romanian                4.7265    4.7226    -0.08%    -1.53%
 leu                                                 
 Croatian                7.3870    7.3873    +0.00%    +0.31%
 kuna                                                
 Serbian               117.5400  117.7000    +0.14%    +0.65%
 dinar                                               
 Note:      calculated from                1800 CET          
 daily                                               
 change                                              
                                                             
                       Latest    Previous  Daily     Change
                                 close     change    in 2019
 Prague                 1032.76  1030.430    +0.23%    +4.68%
                                        0            
 Budapest              40110.58  40137.22    -0.07%    +2.48%
 Warsaw                 2078.39   2078.39    +0.00%    -8.71%
 Bucharest              9052.10   9052.10    +0.00%   +22.60%
 Ljubljana               862.89    862.89    +0.00%    +7.29%
 Zagreb                 1890.63   1890.63    +0.00%    +8.11%
 Belgrade   <.BELEX15    743.06    745.36    -0.31%    -2.45%
            >                                        
 Sofia                   576.96    582.55    -0.96%    -2.94%
                       BONDS                                 
                       Yield     Yield     Spread    Daily
                       (bid)     change    vs Bund   change
                                                     in
 Czech                                               spread
 Republic                                            
   2-year   <CZ2YT=RR    1.1120    0.1050   +199bps    +11bps
            >                                        
   5-year   <CZ5YT=RR    0.7540    0.0340   +164bps     +3bps
            >                                        
   10-year  <CZ10YT=R    0.9020   -0.0090   +155bps     -1bps
            R>                                       
 Poland                                                      
   2-year   <PL2YT=RR    1.5060   -0.0050   +238bps     +0bps
            >                                        
   5-year   <PL5YT=RR    1.6250   -0.0030   +251bps     +0bps
            >                                        
   10-year  <PL10YT=R    1.7590   -0.0010   +241bps     +0bps
            R>                                       
            FORWARD    RATE      AGREEMEN                    
                                 T                   
                       3x6       6x9       9x12      3M
                                                     interban
                                                     k
 Czech Rep          <      1.98      1.79      1.53      2.14
            PRIBOR=>                                 
 Hungary            <      0.28      0.28      0.32      0.26
            BUBOR=>                                  
 Poland             <      1.69      1.61      1.55      1.72
            WIBOR=>                                  
 Note: FRA  are for ask prices                               
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