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CEE MARKETS-Currencies, stocks tread cautiously as Brexit talks resume

BUCHAREST, Oct 16 (Reuters) - Central European currencies and stocks struggled to find direction in early trade on Wednesday, with investors watching apprehensively as the clock ran down on negotiations over a possible Brexit deal. British and European Union officials were to resume talks on Wednesday, a few hours after late-night negotiations wound up, but it was far from clear they would reach an agreement before an EU summit on Thursday. By 0910 GMT, the Hungarian forint and Polish zloty were down 0.2% and 0.1% respectively, while the Czech crown and Romanian leu were flat. Warsaw's blue chip index was up 0.2% on the day, while Hungary's fell 0.2%. In Prague, stocks were up 0.1% while Bucharest's was flat. "Zloty's performance this week will probably be determined by the international situation," ING said in a note. In Romania, centrist President Klaus Iohannis appointed on Tuesday opposition Liberal Party leader Ludovic Orban as prime minister-designate to form a transitional government until a parliamentary election next year. The leu held steady through a government collapse following a no-confidence vote last week and negotiations for a new parliamentary majority, but widening domestic deficits and souring global economic prospects are weighing on assets. "While we would regard recent efforts to overcome the political vacuum as basically positive, political uncertainty is set to remain elevated in Romania," Raiffeisen Bank said in a note, adding it would maintain its cautious stance on Romanian government debt. In Prague, two Czech rate-setters spoke in favour of tightening interest rates, in contrast with other policymakers in the region who have stayed on hold and the world's largest central banks which have eased borrowing costs. The crown was unmoved by the comments. Monetary policy loosening by the world's largest central banks has so far eased pressure to act on policymakers in central Europe, where consumption-driven economic growth has mostly held up in the face of a euro zone slowdown and Brexit concerns.

CEE SNAPSHO ATMARKETS T 1131

CET CURRENC IES

Latest Previou Daily Change

s

bid close change in 2019Czech <EURCZK= 25.7800 25.7800 +0.00% -0.28%crown >Hungary <EURHUF= 333.000 332.100 -0.27% -3.58%forint > 0 0Polish <EURPLN= 4.2995 4.2920 -0.17% -0.23%zloty >Romanian <EURRON= 4.7530 4.7537 +0.01% -2.08%leu >Croatian <EURHRK= 7.4340 7.4353 +0.02% -0.32%kuna >Serbian <EURRSD= 117.400 117.470 +0.06% +0.77%dinar > 0 0Note: calculated from 1800daily CET

change

Latest Previou Daily Change

s

close change in 2019Prague 1019.45 1020.39 -0.09% +3.33%

00

Budapest 40532.7 40578.1 -0.11% +3.56%3 8Warsaw 2156.71 2154.80 +0.09% -5.27%Bucharest 9546.49 9545.34 +0.01% +29.29

%

Ljubljana <.SBITOP 870.39 871.40 -0.12% +8.22%>Zagreb 2003.77 2000.79 +0.15% +14.58

%

Belgrade <.BELEX1 744.83 742.41 +0.33% -2.21%

5>

Sofia 560.46 561.47 -0.18% -5.72%

BONDS

Yield Yield Spread Daily(bid) change vs Bund change

in

Czech spread

Republic

2-year <CZ2YT=R 1.2900 0.0220 +197bp +2bpsR> s5-year <CZ5YT=R 1.0340 -0.0100 +171bp -2bpsR> s10-year <CZ10YT= 1.3770 0.0540 +180bp +6bpsRR> s

Poland

2-year <PL2YT=R 1.5030 -0.0200 +218bp -2bpsR> s5-year <PL5YT=R 1.7320 -0.0310 +241bp -4bpsR> s10-year <PL10YT= 1.9870 0.0030 +241bp +1bpsRR> sFORWARD RATE AGREEME

NT

3x6 6x9 9x12 3M

interba nk

Czech Rep 2.28 2.29 2.20 2.17

PRIBOR=

>

Hungary 0.30 0.32 0.36 0.21Poland 1.73 1.69 1.67 1.71

Note: FRA are for ask

quotes prices**************************************************************

(Reporting by Luiza Ilie in Bucharest, Anna Koper in Warsaw and Robert Muller in Prague; Editing by Alex Richardson)