October 29, 2019 / 11:56 AM / 19 days ago

CEE MARKETS-Currencies weaken after strong run; CME shares sink

    WARSAW, Oct 29 (Reuters) - Central European currencies gave
up some of their recent gains on Tuesday after a strong run in
recent weeks, while in Prague Central European Media Enterprises
(CME) shares plunged on disappointment at the
price of a acquisition bid.
     CME shares were down over 6% as investors ditched the stock
after AT&T's agreement to sell its majority stake to Czech
investor PPF in a $2.1 billion deal missed price expectations.
    Analysts said investors had expected a better price per
share given the recent stock and company performance.
Shareholders also had little chance to fight for a higher price
before the deal's completion expected in the middle of next
year.
    On currency markets, the Czech crown shed 0.2% to
be bid at 25.56 to the euro and the Hungarian forint
fell 0.1% to 328.55. The Polish zloty was steady at
4.272.
    "Current movements... are a consolidation after significant
strengthening of PLN in recent weeks," DM BOS analyst Konrad
Ryczko said in a note.
    "Investors are waiting for tomorrow's Fed rate cut."
    In their two-day policy meeting this week, U.S. Federal
Reserve officials look set to cut rates for the third time this
year, lowering the overnight benchmark lending rate to a new
range of between 1.5% and 1.75%.
    The Romanian leu was little changed at 4.757,
ahead of parliamentary committee hearings of the proposed
cabinet ministers of centre-right Prime Minister designate
Ludovic Orban, with a vote of confidence expected on Nov. 4. 
    After rounds of negotiations, Orban's cabinet remains just
short of the 233 votes it needs to pass, with more talks
planned.
    In Hungary, the average unemployment rate for the
July-September period came in at 3.5%, up slightly from 3.4% in
June-August.
    "Despite some signs that the slowdown has arrived in
Hungary, the labour market has remained resilient," Peter
Virovacz, Senior Economist at ING in Hungary said in a note.
    Stocks were mainly higher, with all of the region's main
indices in positive territory.
    The WIG 20 in Warsaw was up 0.5%, with Orange
Polska rising 3.5% after it posted results broadly in
line with market expectations and confirmed its guidance.

    In Prague the PX index was up 0.2% while Budapest's
main index gained 0.3%.
    Benchmark Polish 10-year yields were little
changed at 2.022%. Czech 10-year bonds traded at
1.382%, up 1 basis point.
    "The Polish yield curve has... moved up, reflecting movement
in the core markets. In the coming days, the Polish market will
remain under the dominant influence of foreign events," PKO BP
analysts said in a note
                                CEE MARKETS        SNAPSHOT    AT                        
                                                                 1158 CET                
                                                   CURRENCIES                            
                                                   Latest      Previous        Daily     Change
                                                   bid         close           change    in 2019
 EURCZK=    Czech crown                            25.5600     25.5020         -0.23%    +0.58%
 EURHUF=    Hungary forint                         328.5500    328.2400        -0.09%    -2.27%
 EURPLN=    Polish zloty                           4.2720      4.2730          +0.02%    +0.41%
 EURRON=    Romanian leu                           4.7570      4.7548          -0.05%    -2.17%
 EURHRK=    Croatian kuna                          7.4550      7.4530          -0.03%    -0.60%
 EURRSD=    Serbian dinar                          117.4000    117.4200        +0.02%    +0.77%
            Note: daily change  calculated from                                1800 CET  
                                                                                         
                                                   Latest      Previous        Daily     Change
                                                               close           change    in 2019
 .PX        Prague                                 1064.08     1061.5400       +0.24%    +7.86%
 .BUX       Budapest                               42052.70    41938.54        +0.27%    +7.44%
 .WIG20     Warsaw                                 2220.32     2211.80         +0.39%    -2.47%
 .BETI      Bucharest                              9698.71     9681.80         +0.17%    +31.35%
 .SBITOP    Ljubljana                              860.67      865.48          -0.56%    +7.01%
 .CRBEX     Zagreb                                 2027.44     2014.73         +0.63%    +15.93%
 .BELEX15   Belgrade                               746.90      747.46          -0.07%    -1.94%
 .SOFIX     Sofia                                  560.79      560.16          +0.11%    -5.66%
                                                   BONDS                                 
                                                   Yield       Yield           Spread    Daily
                                                   (bid)       change          vs Bund   change in
            Czech Republic                                                               spread
 CZ2YT=RR   2-year                                 1.2940      0.0360          +194bps   +4bps
 CZ5YT=RR   5-year                                 1.0850      -0.0660         +169bps   -7bps
 CZ10YT=RR  10-year                                1.3820      0.0110          +172bps   +3bps
            Poland                                                                       
 PL2YT=RR   2-year                                 1.4640      -0.0190         +211bps   -2bps
 PL5YT=RR   5-year                                 1.7490      -0.0100         +235bps   -1bps
 PL10YT=RR  10-year                                2.0220      0.0020          +236bps   +2bps
                                FORWARD            RATE        AGREEMENT                 
                                                   3x6         6x9             9x12      3M interbank
            Czech Rep                              2.24        2.22            2.13      2.18
            Hungary                                0.27        0.33            0.31      0.20
            Poland                                 1.72        1.70            1.68      1.72
            Note: FRA quotes    are for ask prices                                       
            
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