×

UPDATE 1-CEE MARKETS-Cbank tender weakens forint; zloty jittery on reform fears

fears@

* Polish president wants greater say in nomination of judges

* Political concerns keep Polish assets jittery

* Hungarian cbank pumps money into markets through swap tender

* Czech central bank seen keeping rates on hold on Wednesday

(Recasts with Polish president's proposals, Hungarian tender, Reuters poll on Czech rate meeting) BUDAPEST/WARSAW, Sept 25 (Reuters) - The zloty and forint eased on Monday as Hungary's central bank (NBH) pumped further liquidity into markets while Polish President Andrzej Duda demanded a greater say over the nomination of judges. In July Duda vetoed judicial reforms passed by parliament, but his own proposals, tabled on Monday, will also be closely scrutinized by the European Union and rights groups concerned about Warsaw's compliance with rule-of-law standards.

The zloty was jittery and trading down 0.2 percent at 4.2712 against the euro at 1412 GMT. Polish government bond prices tracked euro zone peers higher but gave up some of their gains, with the 10-year paper trading at a yield of 3.2845 percent, still down 4 basis points. While equities mostly eased in Central Europe, traders did not see any significant impact on regional assets from elections in Germany, the region's biggest export market and a key power in the EU. German Chancellor Angela Merkel won a fourth term in Sunday's vote but will face tough coalition talks after the Social Democrats (SPD) said they would not continue to rule with her and harsh opposition criticism after a surge in support for the far-right. The SPD's withdrawal from the government could prove positive for Poland because SPD politicians have been vocal critics of Poland's right-wing government, said Millennium Bank analyst Mateusz Sutowicz. The forint tested four-month lows against the euro. Trading at 310.35, it was down 0.2 percent. It was weakened by the NBH's euro/forint swap tender, which provided commercial banks with additional forint liquidity, also contributing to a continuing slide in Hungarian government debt yields. The yield on three-year paper dropped 4 basis points from their early levels to 0.36 percent. The Czech crown was steady at 26.04 against the euro ahead of the Czech central bank's meeting on Wednesday. Five out of 16 analysts in a Reuters poll projected that the bank would lift interest rates further at the meeting, while 10 forecast a rise at the next meeting in November. Czech billionaire Andrej Babis's ANO party maintains a strong lead going into an Oct. 20-21 election with support at 30.9 percent, according to an opinion poll released on Monday.

Babis told Reuters on Friday that the Czech Republic and similar smaller states should have a stronger voice in the European Union.

CEE MARKETS SNAPSH AT 1612 CET

OT CURRENCIES

Latest Previo Daily Change

us

bid close change in

2017

Czech crown 26.040 26.039 +0.00 3.71% 0 0 % Hungary 310.35 309.88 -0.15% -0.49% forint 00 00 Polish zloty 4.2712 4.2673 -0.09% 3.11% Romanian leu 4.5990 4.5983 -0.02% -1.39% Croatian 7.4850 7.4845 -0.01% 0.94%

kuna

Serbian 119.45 119.40 -0.04% 3.26% dinar 00 00 Note: daily calculated previo close 1800 change from us at CET

STOCKS

Latest Previo Daily Change

us

close change in

2017

Prague 1041.2 1046.5 -0.50% +12.9 6 1 8% Budapest 38070. 38178. -0.28% +18.9 81 63 6% Warsaw 2458.5 2480.7 -0.90% +26.2 0 3 1% Bucharest 7884.5 7848.1 +0.46 +11.2 2 0 % 8% Ljubljana 802.66 799.42 +0.41 +11.8 % 5% Zagreb 1819.3 1829.4 -0.55% -8.80% 6 2 Belgrade 724.02 725.19 -0.16% +0.93

%

Sofia 680.87 678.65 +0.33 +16.1 % 0%

BONDS

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

Republic

2-year 0.056 0.282 +076b +30bp ps s 5-year 0.112 -0.091 +041b -5bps

ps

10-year 1.106 -0.076 +070b -4bps

ps Poland

2-year 1.726 -0.051 +243b -3bps

ps

5-year 2.64 -0.046 +294b -1bps

ps

10-year 3.294 -0.046 +288b -1bps

ps

FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M

interb ank

Czech Rep <PR 0.71 0.86 0.96 0

IBOR=>

Hungary <BU 0.09 0.08 0.11 0.04

BOR=>

Poland <WI 1.759 1.81 1.865 1.73

BOR=>

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

(Additional reporting by Jason Hovet in Prague/Marcin Goettig in Warsaw; Editing by David Goodman)