CEE MARKETS 2-Assets mixed as Fed, ECB leave investors uncertain

Telekom Slovenije, D.d

18/09/2014 16:32

* Fed, ECB loan allocation leave market trend uncertain 
    * Rating rumour lifts forint; zloty down 
    * Bonds seesaw, stocks mixed 
 
    By Sandor Peto and Marton Dunai 
    BUDAPEST, Sept 18 (Reuters) - Central European assets were 
mixed on Thursday as the European Central Bank's allocations of 
cheap loans and Wednesday's Federal Reserve meeting left 
investors guessing about global trends. 
    Hungary's forint  EURHUF=  gained 0.19 percent against the 
euro by 1402 GMT on what one Budapest-based currency dealer said 
were hopes that S&P would revise its rating on Hungary upwards 
on Friday.  
    Standard & Poor's has a 'BB' rating on Hungary's long-term 
foreign currency debt. It improved the outlook to "stable" from 
"negative" on March 28. 
    Hungary's debt is the highest in the region at around 80 
percent of economic output. But its economy grew a robust 3.9 
percent in annual terms in the second quarter. 
    Recovery slowed in other economies in the region as its main 
trading partner, the euro zone, struggled and the European Union 
got embroiled in a sanctions war with Russia over the Ukrainian 
crisis. 
    The minutes of the Polish central bank's last meeting 
confirmed that most of its policymakers expect cuts in the 
bank's 2.5 percent main interest rates, to fight deflation and 
help the economy grow.  ID:nL6N0RJ2XX  
    The zloty shed 0.36 percent against the euro to 4.2, well 
underperforming regional peers. 
     
    GLOBAL BACKDROP UNCERTAIN 
    Stock markets were mixed. Prague's main index  .PX  gained 
1.1 percent, the index of Warsaw's top 20 stocks  .WIG20  fell 
0.48 percent and Sofia's main index  .SOFIX  shed 0.8 percent. 
    Government bonds seesawed and closed the day weaker. The 
losses were mainly in long maturities, where euro zone and U.S. 
Treasury moves tend to have more influence compared with 
short-term debt, which is driven by central bank interest rates. 
    Poland's 10-year bond yield  PL10YT=RR  rose 5 basis points 
to 3.09 percent and Hungary's 10-year yield  HU10YT=RR  rose 3 
basis points to 4.71 percent, even though good demand helped 
Hungary lift its offer at its bond auctions.  HUAUCTION01  
 HUAUCTION02   ID:nB3N0OF00M         
    The prospect of loose ECB monetary policy has helped Central 
European assets in the past weeks; concern that the Fed may 
shift to a more hawkish stance has curbed the gains. 
    After its meeting on Wednesday, the Fed reiterated that 
rates would stay ultra-low for a "considerable time". But it 
added that they might rise faster than expected once they do 
start moving. 
    The ECB saw far less demand than expected for its new 
four-year loans to banks, raising doubts about its stimulus 
plans.  ID:nL6N0RJ2BH  Dealers said the global backdrop which 
drives risk appetite remained uncertain. 
    Budapest-based brokerage Erste Investment said it expected a 
jump in volatility and turnover in the Budapest Stock Exchange 
on Friday, the last session before changes in the weights of its 
main index  .BUX  and the regional CECE index  .CECEEUR  
    Slovenia's telecoms operator, Telekom Slovenia  TLSG.LJ , 
extended the gains posted since incoming finance minister Dusan 
Mramor said on Monday the privatisation of the company would 
continue. Parliament is expected to approve the new centre-left 
cabinet of Prime Minister Miro Cerar late on Thursday. 
 *                                                            * 
 **************** CEE MARKETS SNAPSHOT AT 1602 CET ************  
 ************************* CURRENCIES ************************* 
                            Latest  Previous   Daily   Change   
                            bid     close      change  in 2014  
 Czech crown      EURCZK=    27.520    27.530   +0.04%  -0.68%  
 Hungary forint   EURHUF=   312.250   312.830   +0.19%  -4.89%  
 Polish zloty     EURPLN=     4.200     4.184   -0.36%  -1.19%  
 Romanian leu     EURRON=     4.411     4.417   +0.13%  +1.11%  
 Croatian kuna    EURHRK=     7.628     7.626   -0.02%  -0.12%  
 Serbian dinar    EURRSD=   118.350   118.700   +0.30%  -3.25%  
 Note: daily change calculated from previous close at 1800 CET  
 **************************** STOCKS ************************** 
                            Latest   Previous  Daily   Change   
                                     close     change  in 2014  
 Prague           .PX         995.22   984.53   +1.09%  +0.84%  
 Budapest         .BUX      18668.84 18775.53   -0.57%  +1.83%  
 Warsaw           .WIG20     2495.90  2515.27   -0.77%  +3.81%  
 Bucharest        .BETI      7206.86  7176.20   +0.43% +11.25%  
 Ljubljana        .SBITOP     838.72   834.92   +0.46% +30.85%  
 Zagreb           .CRBEX     1887.87  1881.47   +0.34%  +6.04%  
 Belgrade         .BELEX15    636.72   630.43   +1.00% +15.43%  
 Sofia            .SOFIX      546.26   550.72   -0.81% +11.17%  
 ***************************** BONDS ************************** 
                        Yield    Yield    Spread     Daily      
                        (bid)    change   vs Bund    change in  
 Czech Republic                                      spread     
   2-year    CZ2YT=RR    0.174    +0.027   +022bps    +1bps     
   5-year    CZ5YT=RR    0.409    +0.011   +016bps    -3bps     
  10-year    CZ10YT=RR   1.169    -0.010   +007bps    -5bps     
 Hungary                                                        
   3-year    HU3YT=RR    3.270    +0.020   +327bps    +0bps     
   5-year    HU5YT=RR    3.730    -0.030   +348bps    -7bps     
  10-year    HU10YT=RR   4.760    -0.020   +366bps    -6bps     
 Poland  
   2-year    PL2YT=RR    2.014    -0.052   +206bps    -7bps   
   5-year    PL5YT=RR    2.454    -0.019   +220bps    -6bps   
  10-year    PL10YT=RR   3.199    +0.039   +210bps    -1bps   
 ******************* FORWARD RATE AGREEMENTS ****************** 
                            3x6     6x9    9x12 3M interbank 
 Czech Rep  CZKFRA  PRIBOR=   0.345   0.360  0.355   0.35  
 Hungary    HUFFRA  BUBOR=    2.180   2.250  2.320   2.09  
 Poland     PLNFRA  WIBOR=    1.960   1.850  1.860   2.44  
 Note: FRA quotes are for ask prices  
 ************************************************************** 
  
 (Additional reporting Marja Novak in Ljubljana; Editing by 
Susan Fenton, Larry King) 
 ((marton.dunai@thomsonreuters.com;)(+36-1-327-4742;)(Reuters 
Messaging: marton.dunai.thomsonreuters.com@reuters.net)) 
  
((For related news and prices, click on the codes in brackets: 
All emerging market news [EMRG] [CEEU] [CEE/] 
Spot FX rates 
Eastern Europe spot FX   Middle East spot FX  
Asia spot FX           Latin America spot FX  
Other news and reports 
World central bank news [CEN] Economic Data Guide  
Official rates [GLOBAL/INT]   Emerging Diary [EMRG/DIARY] 
Top events [M/DIARY]  Diaries [DIARY] Diaries Index [IND/DIARY]))