Wires

CEE MARKETS-Forint, crown give back gains as US-Iran tensions grow

PRAGUE, Jan 6 (Reuters) - Hungary's forint retreated to a key level against the euro on Monday as central Europe's currencies gave up some recent gains amid growing U.S.-Iranian tensions that hit sentiment in the region. The Czech crown also fell and backed off 20-month peaks hit last week, bidding at 25.386 to the euro, down 0.2%. The forint, after touching a nearly two-week high in new year trade, fluctuated around 330 per euro as traders expected a test of the resistance level. It was off 0.2% at 330.05 at 0923 GMT. "Investors are nervous, and the positive story is less visible for the forint right now," a Budapest-based dealer said. Investors grew cautious about riskier assets, worried that the killing of Iran's most prominent military commander by the United States could trigger a broader Middle East conflict. The new worries - after the region's currencies were hit for much of 2019 by global trade concerns and uncertainty over Britain's European Union divorce - were hitting sentiment in the region following a rise in assets in recent months. Stock markets dropped, with Budapest falling 1.7% and Prague down 0.8% Poland's zloty was flat while local markets were closed for a holiday. Romania's leu was also steady. Romanian investors were geared up for the country's first bond auction of 2020, with the finance ministry offering debt due in 2023. "It will be interesting to see whether the new levels are still interesting for investors, as the yields have shifted almost 30 basis points lower from last months similar auction," ING analysts said in a note. "We are a touch cautious on the result and expect an average yield around secondary market bids of 3.90%." Czech bond yields were mixed and forward rate markets discounted any chances of interest rate cuts ahead. The Czech central bank, the most hawkish in the region, has voted against a hike at the past three meetings. Minutes from the bank's Dec. 18 meeting, published on Friday, showed rate cuts remain off the table, analysts said.

CEE SNAPSHO ATMARKETS T 1023

CET CURRENC IES

Latest Previou Daily Change

s

bid close change in 2020EURCZK Czech <EURCZK 25.3860 25.3460 -0.16% +0.18%= crown =>EURHUF Hungary <EURHUF 330.050 329.480 -0.17% +0.33%= forint => 0 0EURPLN Polish <EURPLN 4.2425 4.2422 -0.01% +0.33%= zloty =>EURRON Romanian <EURRON 4.7750 4.7766 +0.03% +0.28%= leu =>EURHRK Croatian <EURHRK 7.4517 7.4453 -0.09% -0.08%= kuna =>EURRSD Serbian <EURRSD 117.400 117.570 +0.14% +0.14%= dinar => 0 0Note: calculated from 1800daily CET

change

Latest Previou Daily Change

s

close change in 2020.PX Prague 1111.72 1121.44 -0.87% -0.35%

00

.BUX Budapest 45353.5 46141.2 -1.71% -1.58%1 2.WIG20 Warsaw <.WIG20 2173.97 2173.97 +0.00% +1.11%>.BETI Buchares 9911.45 9921.59 -0.10% -0.66%

t

.SBITO Ljubljan <.SBITO 927.59 930.97 -0.36% +0.19%P a P>.CRBEX Zagreb <.CRBEX 2036.69 2036.69 +0.00% +0.95%>.BELEX Belgrade <.BELEX 801.69 801.69 +0.00% +0.00%15 15>.SOFIX Sofia <.SOFIX 569.86 568.60 +0.22% +0.30%>

BONDS

Yield Yield Spread Daily(bid) change vs Bund change

in

Czech spread

Republic

CZ2YT= 2-year <CZ2YT= 1.7740 0.0660 +241bp +8bpsRR RR> sCZ5YT= 5-year <CZ5YT= 1.4290 -0.0580 +200bp -5bpsRR RR> sCZ10YT <CZ10YT 1.6070 -0.0130 +191bp +1bps=RR 10-year =RR> s

Poland

PL2YT= 2-year <PL2YT= 1.4890 0.0080 +212bp +2bpsRR RR> sPL5YT= 5-year <PL5YT= 1.7890 -0.0180 +236bp -1bpsRR RR> sPL10YT <PL10YT 2.0690 -0.0050 +237bp +1bps=RR 10-year =RR> sFORWARD RATE AGREEME

NT

3x6 6x9 9x12 3M

interba nk

Czech <CZKFRA 2.25 2.25 2.19 2.17Rep ><PRIBO

R=>

Hungary <HUFFRA 0.24 0.30 0.42 0.16><BUBOR

=>

Poland <PLNFRA 1.71 1.69 1.68 1.71><WIBOR>Note: are for askFRA prices

quotes

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(Reporting by Jason Hovet in Prague, Marton Dunai in Budapest and Radu Marinas in Bucharest, Editing by William Maclean)