×

CEE MARKETS-OTP lifts Budapest stocks to record, CEE markets await Fed

* CEE assets rangebound ahead of Fed meeting, Polish holiday

* JP Morgan lifts OTP target price, Budapest stocks at record high

* Investors continue to shrug off domestic politics

* Czech central bank urges powers to tame home loan frenzy

BUDAPEST, June 13 (Reuters) - Budapest's main stock index rose to a record high on Tuesday, boosted by a rise of OTP Bank shares after JP Morgan lifted its target price for the stock. OTP firmed by over 1.5 percent to a four-month high of 9,095 forints ($33.22), after JP Morgan changed its target to 12,000 forints from 9,860 forints. "The last time we saw similar value (from JP Morgan) was in 2007," Erste analysts said in a note. Central European markets were generally idle as investors awaited key signals about global interest rate trends from the Federal Reserve's meeting on Wednesday. The week will be also short for many investors in Poland, the region's biggest economy, which will have a national holiday on Thursday. "The tone of the Fed's comments will be key... while it is summer and that also keeps a lid on activity," said Zoltan Varga, analyst of Equilor brokerage. Regional currencies were mixed, with the zloty and the forint firming 0.1 percent against the euro, staying well within the past few weeks' narrow ranges. The leu eased a shade. Investors were not worried over inflation after a jump in Hungary's annual farm producer price index to 4.1 percent in April from 1.4 percent in March and continuing double-digit annual rise in Romanian net wages in April. Romanian data published on Monday showed that annual inflation remained low at 0.6t percent in May, while concerns remain that it could jump, along with the budget deficit, by next year, keeping the leu under pressure. While European politics lacked new developments, investors also shrugged off domestic politics. Local political tension usually affects asset prices only when international markets are also nervous. The European Commission is expected to launch legal cases against the Czechs, Hungary and Poland later on Tuesday for failing to take in asylum-seekers in a quota scheme.

In Croatia, foreign minister Davor Ivo Stier resigned on Monday, following the formation of a new coalition including the conservatives and the liberals. The dinar traded mildly firmer against the euro on Tuesday. The Czech central bank said it was doubling the amount banks must put aside as a precaution for hard times as of July next year because of rapid credit growth. Its governor, Jiri Rusnok also pushed lawmakers to give the bank more powers to tame the growing home loan market.

Bank stocks listed in Prague were mixed. The crown was steady against the euro, off last Friday's the 3-and-1/2-year highs.

CEE MARKETS SNAPSH AT 1042 CET

OT CURRENCIES

Latest Previo Daily Change

us

bid close change in

2017

Czech crown 26.210 26.203 -0.02% 3.04% 0 5 Hungary 307.15 307.53 +0.12 0.54% forint 00 00 % Polish zloty 4.1925 4.1964 +0.09 5.04%

%

Romanian leu 4.5644 4.5623 -0.05% -0.64% Croatian kuna 7.4050 7.4095 +0.06 2.03%

%

Serbian dinar 122.27 122.40 +0.11 0.88% 00 00 % Note: daily calculated previo close 1800 change from us at CET

STOCKS

Latest Previo Daily Change

us

close change in

2017

Prague 1003.7 1004.4 -0.07% +8.91 6 6 % Budapest 35425. 35334. +0.26 +10.6 59 48 % 9% Warsaw 2290.3 2295.0 -0.20% +17.5 4 1 8% Bucharest 8446.3 8451.2 -0.06% +19.2 5 0 1% Ljubljana 790.94 797.45 -0.82% +10.2

2%

Zagreb 1847.3 1841.1 +0.34 -7.40% 1 0 % Belgrade 715.82 723.54 -1.07% -0.22% Sofia 682.59 681.39 +0.18 +16.4 % 0%

BONDS

Yield Yield Spread Daily (bid) change vs change Bund in Czech spread

Republic

2-year -0.086 0.024 +063b +2bps

ps

5-year -0.051 0.052 +038b +4bps

ps

10-year 0.818 0.011 +055b +0bps

ps Poland

2-year 1.885 0 +260b -1bps

ps

5-year 2.59 0 +303b -1bps

ps

10-year 3.162 0.039 +289b +3bps

ps

FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M

interb ank

Czech Rep <PR 0.35 0.43 0.52 0

IBOR=>

Hungary <BU 0.19 0.23 0.29 0.15

BOR=>

Poland <WI 1.754 1.769 1.796 1.73

BOR=>

Note: FRA are for ask quotes prices ********************************************************* ****

($1 = 273.7800 forints)

(Reporting by Sandor Peto, editing by Louise Heavens)