October 30, 2019 / 10:13 AM / 23 days ago

CEE MARKETS-Currencies steady ahead of expected Fed rate cut

    BUCHAREST, Oct 30 (Reuters) - Central European currencies
held steady versus the euro on Wednesday ahead of an expected
U.S. Federal Reserve rate cut, while in Bucharest oil and gas
group OMV Petrom shares hit a one-week low after
posting lower net profit.
    Shares of Romanian oil and gas group OMV Petrom,
majority-controlled by Austria's OMV AG, fell 2.3% to
0.4270 lei ($0.0999) in early trade.
    The company said on Wednesday its third-quarter net profit
attributable to shareholders fell 43% to 785 million lei
($183.47 million).
    By 0940 GMT Bucharest's blue chip index was down
0.3%. Warsaw's main index fell 0.2%, while Budapest
 and Prague shares were up 0.4% and 0.3%,
respectively.
    Currencies were flat against the euro as investors braced
for an interest rate cut by the Federal Reserve and clues on its
policy outlook.
    Monetary policy loosening by the world's largest central
banks has so far eased pressure to act on policymakers in
central Europe, where consumption-driven economic growth has
mostly held up in the face of a euro zone slowdown and concerns
over Britain's now further delayed exit from the European Union.
    "In general, the dovish global central bank backdrop
increases the degrees of freedom for CEE central banks to keep
rates low for longer," Raiffeisen Bank said in a research note.
    Policymakers in the region have kept rates on hold, but in
the Czech Republic some board members have spoken in favour of
hikes. 
    Analysts said the crown will be without any strong
direction until next week's central bank meeting where
policymakers are likely to debate potential rate hikes. In
September the board voted 5-2 for stable rates, with two votes
for a hike.
    In Romania, the leu was unfazed by the rejection on Tuesday
of finance ministry nominee Florin Citu by parliament's joint
budget and finance committees, whose decision is not binding.
    Citu's centrist National Liberal Party aims to win a
parliamentary vote of confidence on Nov. 4, to replace the
outgoing Social Democrat government, ousted in a parliamentary
vote of no-confidence earlier this month.
    The finance ministry is expected to release domestic debt
issuance plans for November, as well as budget data for
September. The widening of the country's budget and current
account deficits have weighed on assets.
    "We expect intensifying pressure in terms of sovereign
financing costs in the short-run due to the weakening stance of
the public finance," BT Capital Partners said in a research
note.        

            CEE       SNAPSHO   AT                      
            MARKETS   T        1100              
                               CET               
                      CURRENC                           
                      IES                        
                      Latest   Previou  Daily    Change
                               s                 
                      bid      close    change   in 2019
 Czech      <EURCZK=  25.5280  25.5470   +0.07%   +0.70%
 crown      >                                    
 Hungary    <EURHUF=  329.800  329.900   +0.03%   -2.64%
 forint     >               0        0           
 Polish     <EURPLN=   4.2660   4.2635   -0.06%   +0.55%
 zloty      >                                    
 Romanian   <EURRON=   4.7570   4.7560   -0.02%   -2.17%
 leu        >                                    
 Croatian   <EURHRK=   7.4670   7.4555   -0.15%   -0.76%
 kuna       >                                    
 Serbian    <EURRSD=  117.540  117.420   -0.10%   +0.65%
 dinar      >               0        0           
 Note:      calculated from             1800            
 daily                                  CET      
 change                                          
                                                        
                      Latest   Previou  Daily    Change
                               s                 
                               close    change   in 2019
 Prague               1064.55  1062.18   +0.22%   +7.91%
                                    00           
 Budapest             42561.1  42453.1   +0.25%   +8.74%
                            4        6           
 Warsaw               2225.18  2227.93   -0.12%   -2.26%
 Bucharest            9687.70  9713.66   -0.27%   +31.20
                                                       %
 Ljubljana  <.SBITOP   858.18   854.19   +0.47%   +6.70%
            >                                    
 Zagreb               2010.81  2017.10   -0.31%   +14.98
                                                       %
 Belgrade   <.BELEX1   749.93   749.57   +0.05%   -1.54%
            5>                                   
 Sofia                 555.98   556.28   -0.05%   -6.47%
                      BONDS                             
                      Yield    Yield    Spread   Daily
                      (bid)    change   vs Bund  change
                                                 in
 Czech                                           spread
 Republic                                        
   2-year   <CZ2YT=R   1.3060   0.0680   +194bp    +6bps
            R>                                s  
   5-year   <CZ5YT=R   1.1200  -0.0170   +172bp    -2bps
            R>                                s  
   10-year  <CZ10YT=   1.3800  -0.0040   +174bp    -1bps
            RR>                               s  
 Poland                                                 
   2-year   <PL2YT=R   1.4510  -0.0200   +209bp    -2bps
            R>                                s  
   5-year   <PL5YT=R   1.7530   0.0070   +236bp    +1bps
            R>                                s  
   10-year  <PL10YT=   2.0170   0.0090   +237bp    +1bps
            RR>                               s  
            FORWARD   RATE     AGREEME                  
                               NT                
                      3x6      6x9      9x12     3M
                                                 interba
                                                 nk
 Czech Rep               2.24     2.22     2.15     2.18
            <PRIBOR=                             
            >                                    
 Hungary                 0.27     0.33     0.37     0.20
                                                 
 Poland                  1.74     1.71     1.68     1.71
                                                 
 Note: FRA  are for ask                                 
 quotes     prices                               
 
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