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CEE MARKETS-Stocks, currencies ease on growth worries

Sandor Peto

* Budapest stocks hit 5-week low, Prague off 2-month high

* Bucharest stock recovery loses steam, tax row eyed

* Czech central bank continues to project crown strengthening

BUDAPEST, Feb 8 (Reuters) - Central European stocks and currencies extended their losses on Friday due to worries over global economic growth and purchases of the U.S. dollar. Budapest led equities losses, with its bluechip index falling 0.7 percent by 1005 GMT to 39,900 points. It was pushed below a technical support line at 40,500 points on Thursday by a report on a surprise fourth-quarter loss from drug maker Richter and a cut in the European Commission's forecasts for economic growth in the euro zone. "(And) there is the (U.S.-China) trade war and other risks which keep sentiment negative for days or even weeks," said Zoltan Varga, analyst of Equilor brokerage in Budapest. Bucharest's bluechip index joined the decline, but later it regained most of the ground. Romanian shares have gained almost 10 percent in the past week amid hopes that the government may amend new taxes levied on banks and energy companies. Prime Minister Viorica Dancila told the Antena3 television that the government may modify the decree on the controversial taxes, but she did not elaborate. Finance Ministry and Romanian central bank officials are expected to meet on Feb. 18 to further discuss the tax on bank assets which is linked to interbank interest rates. Romania's budget and current account deficits, slowing economy and a heat-up in politics in an election year could weaken the leu further from its current ranges between 4.72-4.77 versus the euro, ING analysts said in a note. It eased 0.1 percent on Friday, in line with other units in the region, to 4.7451. Weak demand at its latest auctions could nudge the government towards exempting government bond holdings from the bank tax base and bonds are already pricing in that prospect, ING said. Romanian bonds yields were bid lower by about 10 basis points on Friday in maturities up to 5 years, with the 5-year paper bid at 4.38 percent, a one-month low. Elsewhere, the Czech crown traded slightly weaker at 25.805 versus the euro. The Czech central bank, which kept rates on hold on Thursday, projected a strengthening in the crown to an average rate of 24.8 by the third quarter, a stronger level than 25.315 projected by analysts for the end of July in a Reuters poll.

"With respect to external reasons behind the weak CZK, the CNB is no longer sure whether a rate raise could make the koruna (crown) strengthen at all at the moment," KBC analysts said in a note.



Latest Previous Daily Changebid close change in 2019Czech <EURCZK= 25.8050 25.7940 -0.04% -0.38%crown >Hungary <EURHUF= 319.2800 319.0500 -0.07% +0.57%forint >Polish <EURPLN= 4.3089 4.3085 -0.01% -0.45%zloty >Romanian <EURRON= 4.7451 4.7424 -0.06% -1.92%leu >Croatian <EURHRK= 7.4080 7.4075 -0.01% +0.03%kuna >Serbian <EURRSD= 118.2600 118.3950 +0.11% +0.03%dinar >Note: calculated from 1800 CET

daily change

Latest Previous Daily Changeclose change in 2019Prague 1054.24 1060.920 -0.63% +6.86%


Budapest 39900.45 40173.73 -0.68% +1.95%Warsaw 2358.59 2371.33 -0.54% +3.60%Bucharest 7523.18 7533.85 -0.14% +1.89%Ljubljana <.SBITOP 832.73 832.73 +0.00% +3.54%>Zagreb 1751.42 1767.69 -0.92% +0.15%Belgrade <.BELEX1 702.81 707.01 -0.59% -7.73%


Sofia 573.56 570.97 +0.45% -3.52%


Yield Yield Spread Daily(bid) change vs Bund change


Czech spread


2-year <CZ2YT=R 1.7120 -0.0470 +228bps -6bps


5-year <CZ5YT=R 1.5960 0.0070 +199bps +1bps


10-year <CZ10YT= 1.7090 0.0050 +160bps +1bps

RR> Poland

2-year <PL2YT=R 1.5510 -0.0970 +212bps -11bps


5-year <PL5YT=R 2.1820 -0.0070 +257bps +0bps


10-year <PL10YT= 2.7550 0.0150 +265bps +2bps




3x6 6x9 9x12 3M

interban k

Czech Rep 2.08 2.11 2.13 2.00



Hungary 0.32 0.52 0.67 0.15Poland 1.74 1.72 1.73 1.72

Note: FRA are for ask prices quotes



(Reporting by Sandor Peto Editing by Keith Weir)