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CEE MARKETS-Tax worry hits Bucharest stocks, Hungarian bond yields fall

about 10 basis points along the curve, with the 10-year yield

* Bucharest stocks fall on worry over new bank tax

* Romanian inflation retreats further as expected

* Central banks supports leu via deposit tool

* Hungarian bond yields resume fall ahead of CPI data

(Adds BRD stock fall, Romanian bond and central bank deposit tenders, new comments, Hungarian bond yields fall) BUDAPEST/BUCHAREST, Jan 14 (Reuters) - Romanian stocks hit a 2-year low as concerns over 2019 tax increases on the bank and energy sectors have returned. Sentiment in Central Europe turned sour anyway as a surprise fall in China's exports turned the spotlight again on global economic slowdown worries. Bucharest's blue-chip index fell more than 4 percent, below 2-year lows reached last month after the government announced plans for changes in tax and pensions rules. The measures included a tax on bank assets, linked in an unconventional way to interbank rates which are also in the focus of monetary policy. Banca Transilvania fell 9.5 percent and BRD Groupe Societe Generale shed 7.5 percent. "There's a lot of uncertainty in the market on the new banking tax," one Bucharest-based foreign stocks trader said. Investors still do not know details of the base of the tax and whether it would also apply to mandatory reserves, the trader added. Late on Friday, the European Commission also warned Romania, which holds the EU's rotating presidency, over the government's plans to decriminalise some forms of corruption. The leu shrugged off a continuing fall in Romania's annual inflation to 3.3 percent in December from 3.4 percent in November. The drop from levels above 5 percent last year to within the central bank's 1.5-3.5 percent target range increases the chance that the bank will not increase its interest rates further, analysts said. The government sold less 2023-expiry bonds than planned at an auction, with the average yield rising to 4.41 percent from 4.34 percent. But the leu firmed a shade to 4.68 against the euro as the central bank reduced market liquidity through its one-week deposit tool. "The disinflation process in Romania that enabled ROMGBs (Romanian government bonds) to take part in a broader EM rally in recent weeks is set to bottom out," Raiffeisen analysts said in a note. Hungarian bond yields, however, resumed their fall which stalled in the first week of the year. Yields were fixed lower set at 2.78 percent. The market is optimistic that December inflation data due on Tuesday will show a further drop from 3.1 percent in the annual rate in November, one Budapest-based trader said. "The Fed may not increase rates further, the ECB may tighten later and there are global recession fears: global trends support Hungarian bonds," the trader added.



Latest Previous Daily Changebid close change in 2019Czech <EURCZK= 25.5690 25.5660 -0.01% +0.54%crown >Hungary <EURHUF= 321.4400 321.4000 -0.01% -0.11%forint >Polish <EURPLN= 4.2900 4.2938 +0.09% -0.01%zloty >Romanian <EURRON= 4.6800 4.6830 +0.06% -0.56%leu >Croatian <EURHRK= 7.4350 7.4312 -0.05% -0.34%kuna >Serbian <EURRSD= 118.3200 118.4300 +0.09% -0.02%dinar >Note: calculated from 1800 CET

daily change

Latest Previous Daily Changeclose change in 2019Prague 998.14 1011.440 -1.31% +1.17%


Budapest 40549.30 40886.06 -0.82% +3.60%Warsaw 2320.21 2335.10 -0.64% +1.91%Bucharest 6926.41 7240.73 -4.34% -6.19%Ljubljana <.SBITOP 811.66 803.83 +0.97% +0.92%>Zagreb 1735.70 1734.51 +0.07% -0.75%Sofia 567.87 567.46 +0.07% -4.47%


Yield Yield Spread Daily(bid) change vs Bund change


Czech spread


2-year <CZ2YT=R 1.7910 0.0920 +239bps +10bps


5-year <CZ5YT=R 1.7150 -0.0200 +206bps +0bps


10-year <CZ10YT= 1.8580 0.0040 +164bps +2bps

RR> Poland

2-year <PL2YT=R 1.3480 -0.0190 +195bps -1bps


5-year <PL5YT=R 2.1640 -0.0310 +251bps -1bps


10-year <PL10YT= 2.7480 -0.0080 +253bps +1bps




3x6 6x9 9x12 3M

interban k

Czech Rep 2.14 2.18 2.20 2.01



Hungary 0.24 0.46 0.70 0.13Poland 1.74 1.73 1.73 1.72

Note: FRA are for ask prices quotes



(Reporting by Sandor Peto, editing by Ed Osmond)