Leu jumps from six-week lows, bond yields rise at auctions

* Leu gains; central bank may have intervened
* Romanian government may alter new taxes
* Hungary, Romania sell bonds at increased yields
* Forint hits 10-month high, British Brexit vote watched

(Adds government bond auctions in Bucharest and Budapest)
By Sandor Peto and Luiza Ilie
BUDAPEST/BUCHAREST, March 14 (Reuters) - The leu
rebounded on Thursday from the six-week low it reached late on
Wednesday, after what market participants said may have been
possible intervention by Romania's central bank.
Romanian government bond yields rose to multi-week highs and
the finance ministry sold five-year bonds at an average yield of
4.47 percent, up 18 basis points from a sale four weeks ago.

Romanian asset prices have been jittery in the three months
since the government announced new taxes on various businesses,
including banks.
The government is expected to work out changes to the levies
by next week to prevent a downgrade of its credit rating outlook
to negative from stable by Standard & Poor's.
The leu gained 0.3 percent against the euro to
trade at 4.768 at 0930 GMT, off Wednesday's six-week lows at
"The historically high turnover (on Wednesday) is supporting
the idea of official offers coming in to protect the Romanian
leu," Bucharest-based ING Bank analysts said in a note.
Romania's overnight ROBOR interbank interest rate
was bid at 1.41 percent, unchanged from Wednesday
and still near three-month lows.
The yield on the five-year benchmark Romanian bond
was bid higher by 7 basis points in the secondary
market at 4.32 percent.
Government bond yields rose 1 to 2 basis points in the
region's main markets, tracking Bunds.
The Hungarian government sold 106 billion forints ($381.08
million) worth of bonds at its bi-weekly auction and top-up
tender, boosting its original 65 billion forint offer.

Yields rose from an auction held two weeks ago. But after
the sale they retreated by about 1 basis point in the secondary
market, indicating that demand remained strong.
Regional currencies were mixed as investors waited for a
third British parliamentary vote this week on its planned exit
from the European Union, this time on whether to delay the March
29 deadline.
The forint gained 0.2 percent against the euro to
314.32, setting a 10-month high amid expectations the Hungarian
central bank will start to tighten policy at its meeting on
March 26.
Poland's zloty weakened, trading at 4.3045 versus
the euro.
In equities markets, the stocks OTP, the region's
biggest independent lender which reported record earnings for
2018 two weeks ago, rose more than 1 percent to a record high.

Latest Previous Daily Change
bid close change in 2019
Czech <EURCZK= 25.6740 25.6520 -0.09% +0.13%
crown >
Hungary <EURHUF= 314.3200 314.8500 +0.17% +2.15%
forint >
Polish <EURPLN= 4.3045 4.3005 -0.09% -0.35%
zloty >
Romanian <EURRON= 4.7660 4.7799 +0.29% -2.35%
leu >
Croatian <EURHRK= 7.4230 7.4163 -0.09% -0.18%
kuna >
Serbian <EURRSD= 118.0200 118.1900 +0.14% +0.24%
dinar >
Note: calculated from 1800 CET

Latest Previous Daily Change
close change in 2019
Prague 1068.38 1061.630 +0.64% +8.29%
Budapest 41038.05 40887.58 +0.37% +4.85%
Warsaw 2314.16 2314.79 -0.03% +1.65%
Bucharest 7844.62 7857.52 -0.16% +6.24%
Ljubljana <.SBITOP 869.00 874.53 -0.63% +8.05%
Zagreb 1767.37 1767.34 +0.00% +1.06%
Belgrade <.BELEX1 707.10 705.47 +0.23% -7.17%
Sofia 576.25 578.77 -0.44% -3.06%
Yield Yield Spread Daily
(bid) change vs Bund change
Czech spread
2-year <CZ2YT=R 1.8210 0.0190 +236bps +1bps
5-year <CZ5YT=R 1.7940 0.0070 +218bps +0bps
10-year <CZ10YT= 1.9110 0.0170 +184bps +1bps
2-year <PL2YT=R 1.6310 -0.0900 +217bps -10bps
5-year <PL5YT=R 2.2280 0.0040 +261bps +0bps
10-year <PL10YT= 2.8840 0.0190 +281bps +1bps
3x6 6x9 9x12 3M
Czech Rep 2.21 2.26 2.28 2.03
Hungary 0.41 0.60 0.80 0.14

Poland 1.74 1.74 1.74 1.72

Note: FRA are for ask prices

($1 = 278.1600 forints)

(Editing by Larry King)

First Published: 2019-03-14 12:39:12
Updated 2019-03-14 17:01:19

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