CEE MARKETS-Romania's bond yields up after vote, Santander deal hits Warsaw stocks
05/05/2025 11:04
PRAGUE, May 5 (Reuters) - Warsaw stocks fell on Monday, dragged down by shares in Santander Polska on news Austria's Erste Group Bank acquired a 49% stake in the Santander unit, while Romanian bond yields rose after eurosceptic George Simion won the first round of Romania's presidential election re-run. Romania's 10-year yield RO10YT=RR was quoted up 37 basis points at 7.87% mid-morning, leading moves in the region which was otherwise quieter as a UK holiday thinned trade. A victory by hard-right Simion could isolate Romania, erode private investment and destabilise NATO's eastern flank, political analysts say. "We think that political risks have increased considerably and there could be second-round effects into the economy too," JPMorgan said in a note. The leu EURRON=, which the Romanian central bank keeps in a managed float, was little changed at 4.978 to the euro. On central European equity markets, Santander Polska shares SPL1.WA fell 5% after the Erste deal, whose structure left some uncertainty with investors. The fall pushed the blue-chip WIG20 .WIG20 index down over 1%. The Polish unit of Santander is the country's third largest bank by assets and one of the most profitable on the market. Erste shares ERST.VI, ERST.PR, listed in Vienna and Prague jumped around 7% after it said it would fund the acquisition exclusively from internal resources, with analysts saying they saw potential for growth in the Polish market. Warsaw and other central European bourses have been whip-lashed by U.S. tariff policy in the past month, but have mostly recovered to levels seen earlier this year. Currencies have also recouped most losses seen in April. The Czech crown EURCZK= was at 24.889 to the euro mid-morning, up a touch and hovering not far from nine-month highs it hit in March. Analysts expect the Czech National Bank will deliver another interest rate cut when it meets on Wednesday, although the bank may be near the end of its easing cycle started in 2023. In Poland, analysts forecast a hefty 50-basis-point rate cut also on Wednesday - the first since 2023. The zloty EURPLN= was a touch firmer on Monday, at 4.2775 to the euro. ING analysts said the tone of the central bank after the rate move this week will be key. "We believe that it may not be dovish enough to maintain the current aggressive market expectations regarding the scope of reductions in the cost of money," the analysts said in a note. "The effect of the 'buy rumors, sell facts' strategy will be the strengthening of the Polish currency. We assume that in such a scenario the EUR/PLN exchange rate will move towards 4.25."
| CEE MARKETS SNAPSHOT AT 1122 CET | |||||
| CURRENCIES | Latest trade | Previous close | Daily change | Change in 2025 | |
| Czech crown | EURCZK= | 24.8890 | 24.8940 | +0.02% | +1.29% |
| Hungary forint | EURHUF= | 404.3500 | 404.3500 | +0.00% | +1.75% |
| Polish zloty | EURPLN= | 4.2775 | 4.2800 | +0.06% | -0.02% |
| Romanian leu | EURRON= | 4.9780 | 4.9785 | +0.01% | -0.03% |
| Serbian dinar | EURRSD= | 117.1100 | 117.2300 | +0.10% | -0.14% |
| Note: daily change calculated from 1800 CET | |||||
| STOCKS | Latest | Previous close | Daily change | Change in 2025 | |
| Prague | .PX | 2054.21 | 2059.9400 | -0.28% | +16.71% |
| Budapest | .BUX | 93017.11 | 92196.43 | +0.89% | +17.26% |
| Warsaw | .WIG20 | 2771.88 | 2811.07 | -1.39% | +26.45% |
| Bucharest | .BETI | 16845.55 | 17139.47 | -1.71% | +0.75% |
| BONDS | Yield (bid) | Yield change | Spread vs Bund | Daily change in spread | |
| Czech Rep 2-year | CZ2YT=RR | 3.2960 | -0.0140 | +152bps | -2bps |
| Czech Rep 5-year | CZ5YT=RR | 3.5860 | 0.0040 | +152bps | +1bps |
| Czech Rep 10-year | CZ10YT=RR | 4.0550 | 0.0080 | +154bps | +1bps |
| Poland 2-year | PL2YT=RR | 4.3570 | -0.0220 | +259bps | -3bps |
| Poland 5-year | PL5YT=RR | 4.6830 | 0.0140 | +262bps | +2bps |
| Poland 10-year | PL10YT=RR | 5.2600 | -0.0140 | +274bps | -1bps |
| FORWARD RATE AGREEMENTS | 3x6 | 6x9 | 9x12 | 3M interbank | |
| Czech Rep | CZKFRA, PRIBOR= | 3.49 | 3.31 | 3.18 | 3.65 |
| Hungary | HUFFRA, BUBOR= | 6.88 | 6.60 | 6.07 | 6.50 |
| Poland | PLNFRA, WIBOR= | 4.46 | 4.08 | 3.75 | 5.36 |
| Note: FRA quotes are for ask prices | |||||
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