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CEE MARKETS-Zloty eases ahead of CPI data, Poland leads bank stock slide
* Zloty eases, CPI figures may underpin central bank doves
* Polish markets will be closed on Thursday
* Warsaw bank stock index shed 2 pct, leading fall of CEE
shares
By Sandor Peto and Bartosz Chmielewski
BUDAPEST/WARSAW, June 12 (Reuters) - Warsaw bank shares led
Central European equities lower on Monday as they tracked losses
in Western Europe and Asia following Friday's technology
sell-off on Wall Street.
Investors were also cautious before Wednesday's Federal
Reserve meeting which is expected to raise interest rates and
possibly give signals about the pace of future hikes that could
influence appetite for emerging markets assets.
Poland's zloty eased a quarter of a percent to
4.1932 against the euro by 0857 GMT, while other Central
European currencies were steady.
"Some investors may be also closing their positions ahead of
the expected Fed hike and lower zloty liquidity due to Thursday
(Corpus Christi) national holiday," one Warsaw-based dealer
said.
Some investors expect the breakdown of Polish May inflation
data, due at 1200 GMT, to show lower inflation pressure than
earlier expected.
That would underpin forecasts from Polish central bank
governor Adam Glapinski that the bank is unlikely to start to
lift its record low interest rates until the end of next year.
Another rate setter, Lukasz Hardt, warned last month that a
tightening of the labour market could lift wage-side inflation
pressure as the European Union allows visa-free travel to
Ukrainians.
From this week, Ukrainians can travel to EU member states
without visas, raising the risk that some of the hundreds of
thousand of Ukrainians who work in Poland may move further to
the West, causing a labour shortage in Poland.
"As the risks of the inflation rate overshooting the (2
percent) target in the medium term are relatively low, the MPC
(central bank) is likely to sustain its relatively dovish
rhetoric, especially as demand pressure has been limited despite
labor market tightening," Erste analysts said in a note.
"At this point, we see a possibility of a rate hike only in
(the second half of 2018)," they added.
Warsaw's bluechip stock index fell 1.2 percent, with
the sub-index of bank shares shedding 2 percent, while
Western European bank shares also eased, with the STOXX Europe
600 banks index dropping 1.2 percent.
Polish banks PKO BP and Pekao shed 1.9-2
percent. Other bank stocks in the region eased less, with
Hungary's OTP dropping 0.7 percent, while Budapest's
main index fell half a percent.
CEE MARKETS SNAPSH AT 1057 CET
OT
CURRENCIES
Latest Previo Daily Change
us
bid close change in
2017
Czech crown 26.195 26.202 +0.03 3.10%
0 5 %
Hungary 307.70 307.71 +0.00 0.36%
forint 00 50 %
Polish zloty 4.1932 4.1830 -0.24% 5.02%
Romanian leu 4.5640 4.5615 -0.05% -0.64%
Croatian kuna 7.4080 7.4091 +0.01 1.99%
%
Serbian dinar 122.31 122.36 +0.04 0.85%
00 00 %
Note (Stockholm: NOTE.ST - news) : daily calculated previo close 1800
change from us at CET
STOCKS
Latest Previo Daily Change
us
close change in
2017
Prague 1006.3 1008.1 -0.18% +9.20
7 6 %
Budapest 35223. 35411. -0.53% +10.0
30 01 6%
Warsaw 2303.9 2330.7 -1.15% +18.2
4 2 8%
Bucharest 8473.0 8515.4 -0.50% +19.5
7 0 9%
Ljubljana 788.20 792.17 -0.50% +9.84
%
Zagreb 1840.0 1839.8 +0.01 -7.76%
6 1 %
Belgrade 716.65 718.73 -0.29% -0.10%
Sofia 681.10 675.83 +0.78 +16.1
% 4%
BONDS
Yield Yield Spread Daily
(bid) change vs change
Bund in
Czech spread
Republic
2-year -0.124 0.062 +061b +7bps
ps
5-year -0.109 0.019 +035b +3bps
ps
10-year 0.785 0.01 +054b +3bps
ps
Poland
2-year 1.891 0.003 +262b +1bps
ps
5-year 2.585 0.003 +305b +2bps
ps
10-year 3.124 -0.044 +288b -3bps
ps
FORWARD RATE AGREEMENT
3x6 6x9 9x12 3M
interb
ank
Czech Rep IBOR=> Hungary BOR=> Poland BOR=> Note: FRA are for ask quotes prices ********************************************************** **** (Additional reporting by Radu Marinas in Bucharest; Editing by Andrew Heavens)
