CEE MARKETS-Euro strength stifles currency rise on robust Q3 GDP data

* Romania Q3 GDP leads with 8.8 pct annual growth

* Advance of CEE currencies flounders as euro rallies

* Banca Transilvania leads equities gain in Bucharest

* Hungarian central bank still expected to ease policy

(Recasts with retreat of currencies, Romanian bonds and equities) BUDAPEST/BUCHAREST, Nov 14 (Reuters) - Central European currencies mostly gave up their early gains on Tuesday as many investors preferred buying the euro after robust third-quarter economic growth data from the European Union. Most of the region's currencies firmed 0.1-0.2 percent versus the euro initially after strong output figures from the region, led by the 8.8 percent annual growth rate in Romania.

But Germany, the biggest economy in the euro zone, also reported robust annual growth of more than 3 percent, and that boosted the euro in almost all its crosses. At 1453 GMT, the forint was steady against the euro and the zloty and the Czech crown were weaker by 0.1 percent. "The euro's surge holds up the region's currencies, despite the good local news (on output)," one Budapest-based fixed income trader said. The gains of Central European equities were also limited as investors shunned risky equities globally. Bucharest led, with its main stock index rising 1.1 percent, boosted by a 4 percent rise in the shares of Banca Transilvania. The bank reported 18.7 percent annual jump in its January-September net profits late on Monday, with its lending surging. Romania's output growth exceeded all analyst forecasts in the third quarter, mainly driven by a surge in wages, and the robust figure will fuel expectations that the Romanian central bank will start to lift interest rates soon, market participants said. Romanian government bond yields rose to their highest levels since 2014. Ten-year bonds traded at 4.55 percent, up 8 basis points from Monday. The leu retained its early gain, trading 0.1 percent firmer against the euro at 4.65. But it stayed near Monday's record lows of 4.657 despite the big output rise. It weakened through the 4.6 line after the Romanian central bank said last week it would focus on keeping market interest rates close to its benchmark rate and loosen its grip on the currency. A jump in inflation could lead to rate hikes, fiscal stimulus would also need to be cut back, and the scarcity of labour resources will lead to a slowdown in growth, said ING analyst Ciprian Dascalu. But this year's higher output will make Romania's budget and current account deficits and public debt look better. "It looks that some worries could be offset by the economy growing its way out of troubles," Dascalu said. Slower-growing Hungary has not faced overheating concerns, and the Hungarian central bank may ease policy further at its meeting next week, dealers said. "It may introduce long-term FX swaps," one dealer said.



Latest Previo Daily Change


bid close change in


Czech crown 25.580 25.552 -0.11% 5.58% 0 5 Hungary 311.89 311.93 +0.01 -0.98% forint 00 00 % Polish zloty 4.2405 4.2376 -0.07% 3.85% Romanian leu 4.6500 4.6529 +0.06 -2.47%


Croatian 7.5515 7.5495 -0.03% 0.05%


Serbian 118.35 118.56 +0.18 4.22% dinar 00 00 % Note: daily calculated previo close 1800 change from us at CET


Latest Previo Daily Change


close change in


Prague 1064.3 1062.5 +0.17 +15.4 5 6 % 9% Budapest 39347. 39254. +0.24 +22.9 56 00 % 5% Warsaw 2459.3 2454.6 +0.19 +26.2 4 0 % 5% Bucharest 7826.2 7738.6 +1.13 +10.4 4 6 % 6% Ljubljana 789.08 787.92 +0.15 +9.96 % % Zagreb 1844.6 1842.0 +0.14 -7.53% 9 4 % Belgrade 739.05 736.12 +0.40 +3.02 % % Sofia 669.62 669.22 +0.06 +14.1 % 9%


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


2-year 0.479 0.135 +122b +14bp ps s 5-year 0.883 0.051 +121b +6bps


10-year 1.716 -0.061 +132b -4bps

ps Poland

2-year 1.613 -0.002 +236b +0bps


5-year 2.621 0.013 +295b +2bps


10-year 3.447 0.025 +305b +4bps



interb ank

Czech Rep <PR 0.96 1.12 1.23 0


Hungary <BU 0.03 0.085 0.14 0.03


Poland <WI 1.78 1.821 1.924 1.73


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

(Reporting by Sandor Peto; Editing by Janet Lawrence)