CEE MARKETS-Zloty drifts sideways after strong wage data

    * Stocks, currencies ease mildly on global trade concerns
    * Zloty bucks easing after strong wage, jobs figures

    By Sandor Peto and Alicja Ptak
    BUDAPEST/WARSAW, Feb 19 (Reuters) - The zloty bucked a mild
easing of Central European currencies and stocks on Tuesday,
taking support from stronger than expected growth in Poland's
corporate wages and employment.
    Stocks in emerging markets fell as investors held their
breath ahead of U.S.-China trade talks due this week, while in
Europe a fear of U.S. tariffs on European car sales also weighed
on sentiment.
    With U.S. markets not reopening yet after a long weekend,
trade was thin and price changes muted in Central Europe,
traders said.
    The region's equity indexes eased somewhat, led by the
illiquid Belgrade bourse, whose index shed half a
percent.
    Regional currencies also eased mildly, except for the zloty
 which was steady at 4.33 versus the euro.
    Polish corporate employment rose by 2.9 percent in annual
terms in January and corporate wages jumped by 7.5 percent.
    Both figures were higher than expected, but were unlikely to
change perceptions that the Polish central bank could keep
interest rates at record lows possibly for years.
    ING analysts said in a note that this week's Polish economic
data releases - which also include retail sales due on Thursday
-- could support the zloty.
    The U.S.-China trade talks, which influence sentiment
towards emerging markets, will remain the biggest threat to the
zloty, they said.
    "If the negotiations between them fail, we expect a
temporary increase of EURPLN above 4.35," they added.
    Polish and Hungarian government bond yields dropped
slightly, tracking Bunds, after European Central Bank (ECB)
chief economist Peter Praet said on Monday that the bank would
reassess the outlook for bank lending.
    Germany's ZEW survey, showing that the economic growth
outlook remained subdued, also suggested the ECB interest rates
could remain low, which also means less pressure on central
banks in the European Union's eastern wing to tighten policy.
    "A slow drift in yields and swaps lower remains the trend,"
one Budapest-based fixed income trader said. "The key will be
how U.S. markets open."
    Hungary's 5-year bond yield dropped 5 basis points from
Monday's fixing to 2.21 percent.
    
            CEE       SNAPSHOT   AT                         
            MARKETS             1040 CET            
                      CURRENCI                              
                      ES                            
                      Latest    Previous  Daily     Change
                      bid       close     change    in 2019
 Czech      <EURCZK=   25.7400   25.7370    -0.01%    -0.13%
 crown      >                                       
 Hungary    <EURHUF=  318.2500  318.0500    -0.06%    +0.89%
 forint     >                                       
 Polish     <EURPLN=    4.3301    4.3302    +0.00%    -0.94%
 zloty      >                                       
 Romanian   <EURRON=    4.7480    4.7460    -0.04%    -1.98%
 leu        >                                       
 Croatian   <EURHRK=    7.4110    7.4155    +0.06%    -0.01%
 kuna       >                                       
 Serbian    <EURRSD=  117.9300  118.0000    +0.06%    +0.31%
 dinar      >                                       
 Note:      calculated from               1800 CET          
 daily                                              
 change                                             
                                                            
                      Latest    Previous  Daily     Change
                                close     change    in 2019
 Prague                1062.97  1063.900    -0.09%    +7.75%
                                       0            
 Budapest             40526.96  40653.39    -0.31%    +3.55%
 Warsaw                2326.62   2325.67    +0.04%    +2.20%
 Bucharest             7742.38   7764.01    -0.28%    +4.86%
 Ljubljana  <.SBITOP    842.56    845.90    -0.39%    +4.76%
            >                                       
 Zagreb                1774.47   1773.77    +0.04%    +1.47%
 Belgrade   <.BELEX1    681.51    684.97    -0.51%   -10.53%
            5>                                      
 Sofia                  577.87    578.33    -0.08%    -2.79%
                      BONDS                                 
                      Yield     Yield     Spread    Daily
                      (bid)     change    vs Bund   change
                                                    in
 Czech                                              spread
 Republic                                           
   2-year   <CZ2YT=R    1.8840    0.0800   +246bps     +9bps
            R>                                      
   5-year   <CZ5YT=R    1.8040    0.0450   +221bps     +6bps
            R>                                      
   10-year  <CZ10YT=    1.9020    0.0130   +181bps     +3bps
            RR>                                     
 Poland                                                     
   2-year   <PL2YT=R    1.5680    0.0120   +215bps     +2bps
            R>                                      
   5-year   <PL5YT=R    2.1680   -0.0080   +257bps     +1bps
            R>                                      
   10-year  <PL10YT=    2.6970   -0.0080   +260bps     +1bps
            RR>                                     
            FORWARD   RATE      AGREEMEN                    
                                T                   
                      3x6       6x9       9x12      3M
                                                    interban
                                                    k
 Czech Rep                2.08      2.11      2.13      2.01
            <PRIBOR=                                
            >                                       
 Hungary                  0.38      0.58      0.79      0.15
                                                    
 Poland                   1.73      1.73      1.73      1.72
                                                    
 Note: FRA  are for ask prices                              
 quotes                                             
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 (Reporting by Sandor Peto, editing by Ed Osmond)
  
 
 

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