CEE MARKETS-Investors eye Romanian government, Hungarian central bank

Credit: REUTERS/DAVID W CERNY

Central European currencies remained under pressure on Tuesday as worries about global growth weighed on emerging-market assets, with the Romanian leu slipping around 0.2% after the country's ruling coalition collapsed.

WARSAW, Aug 27 (Reuters) - Central European currencies remained under pressure on Tuesday as worries about global growth weighed on emerging-market assets, with the Romanian leu EURRON= slipping around 0.2% after the country's ruling coalition collapsed.

Elsewhere, the Hungarian forint EURHUF= was near recent lows before the National Bank of Hungary announced its rate decision at 1200 GMT. The bank was expected to leave its base rate HUINT=ECI unchanged at 0.9%.

Romania's ruling Social Democrats lost their small parliamentary majority on Monday after a junior ally quit government over policy, leaving them vulnerable to a confidence vote.

"There's bit of uncertainty related to the government's fate and the market now responds to that," said a dealer with a foreign bank in Bucharest.

The leu, bouncing around its lowest level this month, was the worst-performing currency in the region, down 0.21% against the euro at 0755 GMT to be bid at 4.7355. The Polish zloty EURPLN= was bid at 4.3676 against the euro, down 0.13% from Monday's close. The Czech crown EURCZK= was little changed at 25.784. The forint remained on soft ground.

"The forint moves on a weakening path, with the currency opening at 329.1 (per euro) this morning," Erste Investment analysts said in a note.

"This is a smaller technical level, however, the 330 mark could be much more important from a psychological aspect. If that were to fall, one could start worrying that the currency could suddenly head north (weaker)."

Polish bond yields fell for a second day in a row, after reports the government plans to move its budget out of deficit in 2020 for the first time in 30 years on Tuesday.

At 0859 GMT, the Polish 10-year yield PL10YT=RR was down 4 basis points at 1.898%.

"In Poland, there was also a noticeable narrowing of asset swap spreads, which in turn could be associated with the work being started on next year's budget," PKO Bank Polski analysts said in a note, "The lack of a deficit means much lower than expected Treasury securities issues on the primary market."

Czech 10-year yields CZ10YT=RR were little changed at 1.088%

Stocks traded lower, with Warsaw's WIG 20 .WIG20 down 0.31% and Prague's PX .PX index down 0.38% at 0936 GMT.

Stock markets have been hit by concerns about global trade and a slowdown in major economies.

CEE MARKETS

SNAPSHOT

AT 1131 CET

CURRENCIES

Latest

Previous

Daily

Change

bid

close

change

in 2019

Czech crown

EURCZK=

25.7850

25.7870

+0.01%

-0.30%

Hungary forint

EURHUF=

328.9000

329.0500

+0.05%

-2.38%

Polish zloty

EURPLN=

4.3610

4.3590

-0.05%

-1.64%

Romanian leu

EURRON=

4.7340

4.7288

-0.11%

-1.69%

Croatian kuna

EURHRK=

7.3950

7.3945

-0.01%

+0.20%

Serbian dinar

EURRSD=

117.7700

117.8050

+0.03%

+0.45%

Note: daily change

calculated from

1800 CET

Latest

Previous

Daily

Change

close

change

in 2019

Prague

.PX

1035.30

1039.3500

-0.39%

+4.94%

Budapest

.BUX

39481.66

39661.47

-0.45%

+0.88%

Warsaw

.WIG20

2091.67

2098.41

-0.32%

-8.12%

Bucharest

.BETI

9088.54

9044.48

+0.49%

+23.09%

Ljubljana

.SBITOP

857.67

857.88

-0.02%

+6.64%

Zagreb

.CRBEX

1880.31

1873.74

+0.35%

+7.52%

Belgrade

.BELEX15

748.63

747.28

+0.18%

-1.71%

Sofia

.SOFIX

574.04

574.66

-0.11%

-3.44%

BONDS

Yield

Yield

Spread

Daily

(bid)

change

vs Bund

change in

Czech Republic

spread

2-year

CZ2YT=RR

1.0730

-0.0030

+196bps

-1bps

5-year

CZ5YT=RR

0.8740

0.0300

+178bps

+3bps

10-year

CZ10YT=RR

1.0310

-0.0560

+171bps

-5bps

Poland

2-year

PL2YT=RR

1.5430

-0.0180

+243bps

-3bps

5-year

PL5YT=RR

1.6590

-0.0440

+257bps

-4bps

10-year

PL10YT=RR

1.8940

-0.0440

+257bps

-4bps

FORWARD

RATE

AGREEMENT

3x6

6x9

9x12

3M interbank

Czech Rep

CZKFRAPRIBOR=

2.09

1.89

1.72

2.14

Hungary

HUFFRABUBOR=

0.30

0.39

0.34

0.26

Poland

PLNFRAWIBOR=

1.70

1.66

1.62

1.72

Note: FRA quotes

are for ask prices

**************************************************************

(Reporting by Alan Charlish in Warsaw, Radu-Sorin Marinas in Bucharest, Jason Hovet in Prague, Gergely Szakacs in Budapest; editing by Larry King)

((alan.charlish@thomsonreuters.com; +48 22 653 9723;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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