Zloty extends gain on output surge, shrugs off German worry

Zloty extends gain on output surge, shrugs off German worry
* Zloty bucks fx easing on German coalition talks collapse
* Zloty extends gains on strong Polish output, retail
* Forint eases, cbank could loosen screws further on Tues
* Crown firms, central bank chief sees 50 pct Dec rate hike

(Adds fresh Polish data, Czech central banker comments,
Romanian tenders)
By Sandor Peto and Bartosz Chmielewski
BUDAPEST/WARSAW, Nov 20 (Reuters) - The zloty clung to its
gains on Monday after fresh Polish figures showed a surge in
industrial output and retail sales, reflecting robust economic
growth in Central Europe.
A collapse of coalition talks in Germany limited the zloty's
gains early on Monday.
Figures released later showed a 12.3 percent annual rise in
industrial output in October, exceeding all analyst forecasts,
and 8 percent growth in retail sales.
The zloty firmed 0.1 percent to 4.2329 against the
euro by 1455 GMT, after touching a six-day high at 4.228.
Polish government bond yields rose 2-3 basis points in
longer maturities. The 2-year yield dropped 2 basis points to
1.4805 percent.
"Initially there was some uncertainty around German
coalition talks failure, but at the moment zloty is slightly
gaining," said Millennium Bank analyst Mateusz Sutowicz.
The withdrawal of small centre-right party FDP from
Germany's coalition talks caused some unease among investors in
the European Union's emerging economies.
EU political noise is still a force to be reckoned with,
said Simon Quijano-Evans, strategist of Legal & General
Investment Management in a note.
"CEE members of the EU have the most to lose from any
increase in 'core-EU' nationalism coupled with Brexit
implications for the 2021-27 EU budget," he said, referring to a
loss of Britain's contributions after it quits the EU.
The forint eased 0.2 percent against the euro to
Hungary's central bank, one of the most dovish monetary
authorities in the world, may launch new measures at its meeting
on Tuesday to push long-term market interest rates lower.
That could send the forint towards 315 versus the euro,
Raiffeisen analyst Wolfgang Ernst said in a note, adding though
that the forint could rebound to 310 by the end of the year.
The Romanian government managed to sell debt for the first
time since Nov. 9 at an auction, after pumping 5.83 billion lei
into interbank markets via a repo tender.
It rejected all bids at most tenders held since early
October as yields surged and demand was scarce due to a
liquidity squeeze in leu markets and concerns over fiscal policy
which is boosting the budget deficit and inflation.
The leu eased 0.1 percent.
The crown stood firmer by 0.1 percent at 25.558
versus the euro, after Czech central bank governor Jiri Rusnok
said he saw a 50 percent chance the bank will raise interest
rates again in December after hikes in August and November.

Warsaw's stock index firmed 0.9 percent, driven by
a 3.2 percent rise by the stocks of shoes retailer CCC

Latest Previo Daily Change
bid close change in
Czech crown 25.558 25.594 +0.14 5.67%
0 5 %
Hungary 312.39 311.84 -0.17% -1.14%
forint 00 50
Polish zloty 4.2329 4.2374 +0.11 4.04%
Romanian leu 4.6460 4.6417 -0.09% -2.39%
Croatian 7.5635 7.5675 +0.05 -0.11%
kuna %
Serbian 118.51 118.42 -0.08% 4.08%
dinar 00 00
Note: daily calculated previo close 1800
change from us at CET
Latest Previo Daily Change
close change in
Prague 1053.4 1054.7 -0.12% +14.3
6 5 1%
Budapest 39258. 39279. -0.05% +22.6
93 75 7%
Warsaw 2465.2 2443.8 +0.87 +26.5
1 3 % 6%
Bucharest 7823.6 7772.1 +0.66 +10.4
8 4 % 3%
Ljubljana 787.75 792.06 -0.54% +9.78
Zagreb 1847.0 1853.0 -0.33% -7.41%
5 8
Belgrade 733.93 735.73 -0.24% +2.31
Sofia 669.14 668.87 +0.04 +14.1
% 0%
Yield Yield Spread Daily
(bid) change vs change
Bund in
Czech spread
2-year 0.414 0.049 +113b +6bps
5-year 0.975 0.033 +132b +3bps
10-year 1.806 0.076 +145b +8bps
2-year 1.597 0.001 +231b +1bps
5-year 2.647 0.023 +300b +2bps
10-year 3.442 0.036 +308b +4bps
3x6 6x9 9x12 3M
Czech Rep <PR 1.06 1.21 1.34 0
Hungary <BU 0.08 0.09 0.14 0.03
Poland <WI 1.77 1.83 1.93 1.73
Note: FRA are for ask
quotes prices

(Additional reporting by Radu Marinas in Bucharest/ Jason Hovet
in Prague; Editing by Alison Williams)

First Published: 2017-11-20 11:59:44
Updated 2017-11-20 17:33:36

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