CEE MARKETS-Big swings in Polish assets as EU court rules on FX mortgages

Alan Charlish

* EU top court rules in favor of Swiss franc mortgage holders

* Verdict could lead to costs for banks

* Polish banking index falls

* High volatility in Polish zloty

WARSAW, Oct 3 (Reuters) - The Polish zloty strengthened and banking stocks in central Europe's largest economy were mixed after the European Union's top court ruled on Thursday in favor of Polish consumers in a long running dispute over Swiss franc mortgages. The ruling allows Polish consumers to ask courts to convert their loans into local currency. Some analysts said the terms of that conversion were likely to favor consumers, and potentially lead to costs for banks, although others thought the verdict was less harsh on lenders than it might have been. There were big swings in the zloty and Polish banking stocks as traders tried to interpret the ruling. "There are sudden moves both ways, the market is not sure what to do with it," said a Warsaw-based currency dealer, adding he was waiting for lawyers' opinions of the verdict. Ahead of the ruling, the zloty strengthened against the euro to 4.3604 before weakening to 4.3661 and finally settling to trade at around 4.3441, 0.3% stronger on the day, at 1015 GMT. "Given that it (the verdict) is somewhat less harsh than some investors expected we have appreciation of the zloty," ING Senior economist Piotr Poplawski said. Banking stocks also gained immediately before the verdict, but Warsaw's WIG Banks index was trading 1.35% lower on the day at 1015 GMT. The worst performers were BNP Paribas Bank Polska (-7.7%) and Santander Bank Polska (-3.9%). "We think the decision creates uncertainty about the overall amount and timing of potential bank losses but also that it represents less of an immediate risk about the banking system as a whole," said Morgan Stanley analyst Georgi Deyanov in a note. In Romania, the central bank kept its key interest rate unchanged at 2.50%, as expected. The leu was little changed after the decision. Other currencies in the region were slightly stronger, with the Czech crown gaining 0.09% and the Hungarian forint up 0.17%. Benchmark Polish 10-year yields dropped 2.6 basis points to 1.982%, while Czech 10-year yields fell 2.7 basis points to 1.324%. "Polish government bonds follow core markets, follow U.S. treasuries, follow German bunds and these are lower across the curve," said Pekao economist Arkadiusz Urbanski, pointing to a series of weaker U.S. macroeconomic figures released recently.



Latest Previo Daily Change


bid close change in


EURCZK Czech <EURCZK 25.761 25.782 +0.08 -0.21%= crown => 0 0 %EURHUF Hungary <EURHUF 333.45 333.75 +0.09 -3.71% forint => 00 00 %EURPLN Polish <EURPLN 4.3425 4.3584 +0.37 -1.22%= zloty => %

EURRON Romania <EURRON 4.7475 4.7464 -0.02% -1.97%

= n leu =>

EURHRK Croatia <EURHRK 7.4160 7.4133 -0.04% -0.08%

= n kuna =>EURRSD Serbian <EURRSD 117.36 117.46 +0.09 +0.80= dinar => 00 00 % %Note: calculated from 1800daily CET


Latest Previo Daily Change


close change in


.PX Prague 1005.7 1010.0 -0.43% +1.941 300 %.BUX Budapes 39728. 39416. +0.79 +1.51t 70 77 % %.WIG20 Warsaw <.WIG20 2098.4 2098.2 +0.01 -7.83%> 2 8 %.BETI Buchare 9421.2 9425.2 -0.04% +27.6st 4 0 0%.SBITO Ljublja <.SBITO 862.16 860.16 +0.23 +7.20P na P % %.CRBEX Zagreb <.CRBEX 1932.4 1948.2 -0.81% +10.5> 7 1 0%

.BELEX Belgrad <.BELEX 745.29 752.64 -0.98% -2.15%

15 e 15>.SOFIX Sofia <.SOFIX 564.10 568.53 -0.78% -5.11%>


Yield Yield Spread Daily(bid) change vs changeBund inCzech spread

Republi c

CZ2YT= <CZ2YT= 1.3730 0.0000 +214b +1bpsRR 2-year RR> psCZ5YT= <CZ5YT= 1.1100 -0.043 +192b -2bpsRR 5-year RR> 0 psCZ10YT <CZ10YT 1.3240 -0.027 +190b +1bps=RR 10-year =RR> 0 ps


PL2YT= <PL2YT= 1.5050 -0.009 +227b +0bpsRR 2-year RR> 0 psPL5YT= <PL5YT= 1.7320 -0.030 +255b +0bpsRR 5-year RR> 0 psPL10YT <PL10YT 1.9820 -0.026 +256b +1bps=RR 10-year =RR> 0 psFORWARD RATE AGREEM


3x6 6x9 9x12 3M

interb ank

Czech <CZKFRA 2.22 2.15 2.02 2.16Rep ><PRIBO


Hungary <HUFFRA 0.27 0.32 0.35 0.21><BUBOR


Poland <PLNFRA 1.74 1.70 1.67 1.72><WIBOR


Note: are for askFRA prices




(Reporting by Alan Charlish in Warsaw, Radu-Sorin Marinas in Bucharest and Gergely Szakacs in Budapest; Editing by Mark Potter)