CEE Macro/Fixed Income Daily - 19-Jun-15

Analysts View:
PL Macro: Yesterdays data on industrial output and retail sales growth was
mostly in line with expectations. Industry expanded 2.8% y/y in May (vs
consensus at 3.3% y/y) and retail sales went up 1.8% y/y (vs. consensus at
1.7% y/y). Although the growth seems to have lost momentum from the
beginning of the year, development of monthly indicators suggest similar pace
of growth as was in 1Q15 (our point estimate of GDP is at 3.3% in 2Q15 vs.
3.6% y/y in 1Q15). Data was neutral for FX and bond market that are driven by
global events ongoing Greece negotiations and aftermath of FOMC meeting.
We expect that slightly dovish tone of FOMC takes off some pressure from
yields that may be further reduced in case there is positive solution to Greek
situation. We currently see 10Y at 3.4% at the end of the year and stronger
zloty (4.06 vs. EUR).
HU Bonds: This weeks auctions sent HTB yields to new lows. The Debt
Management Agency (KK) offered and issued HUF 40bn worth of 3M and
12M HTBs with average yields of 1.05% on Tuesday and Thursday. The
floating rate note was well-bid as well. The KK thus issued HUF 10bn, as
planned. Demand for both short-dated and long-term bonds has been strong
so far this year and we do not expect the KK to run into any difficulties in the
primary market. HTB yields are expected to drop below 1% next week, thanks
to the broadly expected rate cut. In line with the market consensus, we expect
the MPC to cut the key rate to 1.5% on Tuesday. The wording of the statement
will be crucial in terms of whether the MPC gives any indication on if it will
carry on with the easing cycle in July. We believe that the EURHUF may
strengthen to 310 by the end of June. However, we see the currency pair
heading north by the end of this year.
RO Bonds: In line with their initial target, the debt managers sold RON 400mn
in three-month T-bills. Average yields moved marginally higher than the level
paid in March (1.22% vs. 1.2%). The bid-to-cover ratio was 2.2. So, the
demand was almost double the raised amount. With a prospective negative
inflation rate in 2H15, the central bank could continue its monetary easing
cycle by reducing minimum reserves in small steps. Additional liquidity may
offer some support to the short end of the yield curve, while medium- and longterm maturities will be driven mainly by external risks. We estimate the 5-year
ROMGB yield at 3.1% in December 2015 and the inflation rate at 0.1% y/y.

FX and MM rates
Exchange
rates

% change (close)
spot

d/d

w/w

EUR/CZK

27.23

-0.1

-0.2

EUR/HUF

313.2

0.4

0.3

EUR/PLN

4.176

0.5

0.7

EUR/RON

4.490

0.0

0.2

EUR/HRK

7.575

-0.1

0.1

EUR/RSD

120.53

0.0

0.2

USD/TRY

2.715

0.2

0.1

EUR/USD

1.134

0.2

0.7

Note: negative changes mean appreciation of LCY

3M offer rate
(fixing)

change (bps)
last

d-d

w-w

CZK

0.31

HUF

1.50

PLN

1.61

RON

1.02

HRK

0.67

-2

-5

TRY

11.08

EUR

-0.01

Bond Yields and CDS spreads

YTM (mid)

current

d-d

w-w

CZ3YGB

0.01

-7

CZ9YGB

0.85

-4

-3

SK3YGB

0.13

13

13

SK10YGB

1.42

14

HU5YGB

3.11

-1

12

HU10YGB

4.10

-4

16

PL3YGB

2.29

-3

PL9YGB

3.14

-10

RO4YGB

2.42

HR3YGB

2.66

-7

-12

HR6YGB

3.05

-17

-18

Source: Bloomberg

CDS (bid, bps)

current

d-d

Czech Republic

51

w-w
1

Hungary

160

15

Poland

77

Romania

133

Croatia

271

Slovakia

50

Turkey

229

-7

Source: Bloomberg

Please refer to www.erstegroup.com for the current list of specific disclosures and the breakdown of Erste Groups investment recommendations. Read the
disclaimer on page 4 of this document.
Erste Group CEE Macro/Fixed Income Daily

Page 1

Selected government bonds

Benchmark
bonds

Czech
Republic

Slovakia

Hungary

Poland

Romania

Croatia

Domestic
Rating

Description

Eurobond

Current
(mid)

change (bps)
d-d

w-w

Rating

Current
(mid)

Description

change (bps)
d-d

w-w

AA-

CZGB 4 04/11/17

0.01

-7

AA-

CZECH 5 06/11/18

EUR

0.25

-1

-1

AA-

CZGB 5 04/11/19

0.27

-1

AA-

CZECH 3 5/8 04/14/21

EUR

0.72

AA-

CZGB 5.7 05/25/24

0.85

-4

-3

AA-

CZECH 3 7/8 05/24/22

EUR

0.89

SLOVGB 3 1/2 02/24/16

0.13

13

13

SLOVAK 4 3/8 05/15/17

EUR

0.05

-1

-1

SLOVGB 4.35 10/14/25

1.42

14

SLOVAK 4 03/26/21

EUR

0.43

-1

-4

BB+

HGB 2 1/2 06/22/18

2.14

-1

-2

BB+

REPHUN 4 3/8 07/04/17

EUR

1.04

-2

-2

BB+

HGB 3 1/2 06/24/20

3.11

-1

12

BB+

REPHUN 5 3/4 06/11/18

EUR

1.14

-5

BB+

HGB 5 1/2 06/24/25

4.10

-4

16

BB+

REPHUN 3 7/8 02/24/20

EUR

1.53

-1

A-

POLGB 4 3/4 10/25/16

1.74

-2

A-

POLAND 3 3/4 03/29/17

EUR

0.24

-1

A-

POLGB 2 1/2 07/25/18

2.29

-3

A-

POLAND 4.2 04/15/20

EUR

0.71

A-

POLGB 4 10/25/23

3.14

-10

A-

POLAND 5 1/4 01/20/25

EUR

1.81

BBB-

ROMGB 5.9 07/26/17

1.91

BBB-

ROMANI 6 1/2 06/18/18

EUR

0.76

-2

BBB-

ROMGB 5.6 11/28/18

2.42

BBB-

ROMANI 4 5/8 09/18/20

EUR

1.88

-1

BBB-

ROMGB 5.85 04/26/23

4.00

30

BBB-

BB

CROATE 6 1/4 11/25/17

2.33

-2

-10

BB

CROATI 5 7/8 07/09/18

EUR

2.57

-5

BB

CROATE 5 1/4 07/10/18

2.66

-7

-12

BB

CROATI 3 7/8 05/30/22

EUR

3.83

-4

BB

CROATE 6 3/4 03/05/20

3.05

-17

-18

BB

Please refer to www.erstegroup.com for the current list of specific disclosures and the breakdown of Erste Groups investment recommendations. Read the
disclaimer on page 4 of this document.
Erste Group CEE Macro/Fixed Income Daily

Page 2

Contacts
Group Research
Head of Group Research
Friedrich Mostbck, CEFA
Major Markets & Credit Research
Head: Gudrun Egger, CEFA
Ralf Burchert (Agency Analyst)
Hans Engel (Senior Analyst International Equities)
Christian Enger, CFA (Covered Bonds)
Margarita Grushanina (Economist AT, CHF)
Alihan Karadagoglu (Senior Analyst Corporate Bonds)
Peter Kaufmann, CFA (Corporate Bonds)
Stephan Lingnau (International Equities)
Carmen Riefler-Kowarsch (Covered Bonds)
Rainer Singer (Senior Economist Euro, US)
Bernadett Povazsai-Rmhild (Corporate Bonds)
Gerald Walek, CFA (Economist Euro)
Katharina Bhm-Klamt (Quantitative Analyst Euro)
Macro/Fixed Income Research CEE
Head CEE: Juraj Kotian (Macro/FI)
Zoltan Arokszallasi (Fixed income)
Katarzyna Rzentarzewska (Fixed income)
CEE Equity Research
Head: Henning Ekuchen
Franz Hrl, CFA (Basic Resources, Real Estate)
Daniel Lion, CIIA (Technology, Ind. Goods&Services)
Thomas Unger; CFA (Banks, Insurance)
Vera Sutedja, CFA (Telecom)
Vladimira Urbankova, MBA (Pharma)
Martina Valenta, MBA (Real Estate)
Editor Research CEE
Brett Aarons
Deniz Gurgen
Research Croatia/Serbia
Head: Mladen Dodig (Equity)
Head: Alen Kovac (Fixed income)
Anto Augustinovic (Equity)
Ivana Rogic (Fixed income)
Milan Deskar-Skrbic (Fixed income)
Davor Spoljar, CFA (Equity)
Research Czech Republic
Head: David Navratil (Fixed income)
Head: Petr Bartek (Equity)
Vaclav Kminek (Media)
Jiri Polansky (Fixed income)
Dana Hajkova (Fixed income)
Martin Krajhanzl (Equity)
Lubos Mokras (Fixed income)
Jan Sedina (Fixed income)
Research Hungary
Head: Jzsef Mir (Equity)
Gergely rmssy (Fixed income)
Andrs Nagy (Equity)
Vivien Barczel (Fixed income)
Tams Pletser, CFA (Oil&Gas)
Research Poland
Head: Magdalena Komaracka, CFA (Equity)
Marek Czachor (Equity)
Tomasz Duda (Equity)
Adam Rzepecki (Equity)
Ludomir Zalewski (Equity)
Research Romania
Chief Economist, Director: Radu Craciun
Head: Mihai Caruntu (Equity)
Head: Dumitru Dulgheru (Fixed income)
Chief Analyst: Eugen Sinca (Fixed income)
Dorina Cobiscan (Fixed Income)
Raluca Florea, CFA (Equity)
Marina Alexandra Spataru (Equity)
Research Turkey
Head: Can Yurtcan
Evrim Dairecioglu (Equity)
M. Grkem Gker (Equity)

+43 (0)5 0100 11902

+43 (0)5 0100 11909
+43 (0)5 0100 16314
+43 (0)5 0100 19835
+43 (0)5 0100 84052
+43 (0)5 0100 11957
+43 (0)5 0100 19633
+43 (0)5 0100 11183
+43 (0)5 0100 16574
+43 (0)5 0100 19632
+43 (0)5 0100 17331
+43 (0)5 0100 17203
+43 (0)5 0100 16360
+43 (0)5 0100 19632
+43 (0)5 0100 17357
+43 (0)5 0100 18781
+43 (0)5 0100 17356
+43 (0)5 0100 19634
+43 (0)5 0100 18506
+43 (0)5 0100 17420
+43 (0)5 0100 17344
+43 (0)5 0100 11905
+43 (0)5 0100 17343
+43 (0)5 0100 11913
+420 956 711 014
+90 212 371 2538
+381 11 22 09 178
+385 72 37 1383
+385 72 37 2833
+385 72 37 2419
+385 72 37 1349
+385 72 37 2825
+420 224 995 439
+420 224 995 227
+420 224 995 289
+420 224 995 192
+420 224 995 172
+420 224 995 434
+420 224 995 456
+420 224 995 391
+361 235 5131
+361 373 2830
+361 235 5132
+361 373 2026
+361 235 5135
+48 22 330 6256
+48 22 330 6254
+48 22 330 6253
+48 22 330 6252
+48 22 330 6251
+40 3735 10424
+40 3735 10427
+40 3735 10433
+40 3735 10435
+40 3735 10436
+40 3735 10428
+40 3735 10429
+90 212 371 2540
+90 212 371 2535
+90 212 371 2534

Sezai Saklaroglu (Equity)

Nilufer Sezgin (Fixed income)
Ilknur Kocaer (Equity)
Research Slovakia
Head: Maria Valachyova, (Fixed income)
Katarina Muchova (Fixed income)

+90 212 371 2533

+90 212 371 2536
+90 212 371 2531
+421 2 4862 4185
+421 2 4862 4762

Treasury - Erste Bank Vienna

Saving Banks & Sales Retail
Head: Thomas Schaufler
Equity Retail Sales
Head: Kurt Gerhold
Fixed Income & Certificate Sales
Head: Uwe Kolar
Treasury Domestic Sales
Head: Markus Kaller
Corporate Sales AT
Head: Christian Skopek

+43 (0)5 0100 84225

+43 (0)5 0100 84232
+43 (0)5 0100 83214
+43 (0)5 0100 84239
+43 (0)5 0100 84146

Fixed Income & Credit Institutional Sales

Institutional Sales
Head: Manfred Neuwirth
Bank and Institutional Sales
Head: Jrgen Niemeier
Institutional Sales AT, GER, LUX, CH
Head: Thomas Almen
Bernd Bollhof
Rene Klasen
Marc Pichler
Dirk Seefeld
Charles-Henry de Fontenilles
Bank and Savingsbanks Sales
Head: Marc Friebertshuser
Fabian Btger
Mathias Gindele
Andreas Goll
Ulrich Inhofner
Sven Kienzle
Jrg Moritzen
Michael Schmotz
Bernd Thaler
Klaus Vosseler
Institutional Sales CEE and International
Head: Jaromir Malak
Central Bank and International Sales
Head: Margit Hraschek
Christian Kssler
Institutional Sales PL and CIS
Pawel Kielek
Marcin Chmielewski (Fixed Income)
Institutional Sales Slovakia
Head: Peter Kniz
Sarlota Sipulova
Institutional Sales Czech Republic
Head: Ondrej Cech
Milan Bartos
Radek Chupik
Pavel Zdichynec
Institutional Sales Croatia
Head: Antun Buric
Natalija Zujic
eljko Pavii
Institutional Sales Hungary
Norbert Siklosi
Attila Hollo
Institutional Sales Romania
Head: Ciprian Mitu
Institutional Solutions and PM
Head: Zachary Carvell
Brigitte Mayr
Mikhail Roshal
Christopher Lampe-Traupe

+43 (0)5 0100 84250

+49 (0)30 8105800 5503
+43 (0)5 0100 84323
+49 (0)30 8105800 5525
+49 (0)30 8105800 5521
+43 (0)5 0100 84118
+49 (0)30 8105800 5523
+43 (0)50100 84115
+49 (0)711 810400 5540
+49 (0) 151 53810580
+49 (0)711 810400 5562
+49 (0)711 810400 5561
+43 (0)50100 85544
+49 (0)711 810400 5541
+49 (0)30 8105800 5581
+43 (0)5 0100 85542
+43 (0)5 0100 85583
+49 (0)711 810400 5560
+43 (0)50100 84254
+43 (0)5 0100 84117
+43 (0)5 0100 84116
+48 22 544 5610
+43 50100 85611
+421 2 4862 5624
+421 2 4862 5629
+420 2 2499 5577
+420 2 2499 5562
+420 2 2499 5565
+420 2 2499 5590
+385 (0)7237 2439
+385 (0)7237 1638
+385 (0)72 37 14 94
+36 1 2355 842
+36 1 2355 846
+40 373 516 532
+43 (0)50100 83308
+43 (0)50100 84781
+43 (0)50100 84787
+49 (0)30 8105800 5507

Please refer to www.erstegroup.com for the current list of specific disclosures and the breakdown of Erste Groups investment recommendations. Read the
disclaimer on page 4 of this document.
Erste Group CEE Macro/Fixed Income Daily

Page 3

Erste Group Bank AG

1010 Wien, Brsegasse
Telefon: +43 (0)5 0100 - interior 11902
14/DG1
Disclaimer
This publication has been prepared by EG Research. This report is for information purposes only.
Publications in the United Kingdom are available only to investment professionals, not private customers, as defined by the rules of the Financial
Services Authority. Individuals who do not have professional experience in matters relating to investments should not rely on it.
The information contained herein has been obtained from public sources believed by EGB to be reliable, but which may not have been
independently justified. No guarantees, representations or warranties are made as to its accuracy, completeness or suitability for any purpose.
This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument or any other action and will not form the
basis or a part of any contract.
Neither EGB nor any of its affiliates, its respective directors, officers or employers accepts any liability whatsoever (in negligence or otherwise) for
any loss howsoever arising from any use of this document or its contents or otherwise arising in connection therewith. Any opinion, estimate or
projection expressed in this publication reflects the current judgement of the author(s) on the date of this report. They do not necessarily reflect the
opinions of EGB and are subject to change without notice. EGB has no obligation to update, modify or amend this report or to otherwise notify a
reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently
becomes inaccurate.
The past performance of financial instruments is not indicative of future results. No assurance can be given that any financial instrument or issuer
described herein would yield favourable investment results.
EGB, its affiliates, principals or employees may have a long or short position or may transact in the financial instrument(s) referred to herein or may
trade in such financial instruments with other customers on a principal basis. EGB may act as a market maker in the financial instruments or
companies discussed herein and may also perform or seek to perform investment banking services for those companies. EGB AG may act upon or
use the information or conclusion contained in this report before it is distributed to other persons.
This report is subject to the copyright of EGB. No part of this publication may be copied or redistributed to persons or firms other than the authorised
recipient without the prior written consent of EGB.
By accepting this report, a recipient hereof agrees to be bound by the foregoing limitations.
Copyright: 2014 EGB AG. All rights reserved.

Please refer to www.erstegroup.com for the current list of specific disclosures and the breakdown of Erste Groups investment recommendations. Read the
disclaimer on page 4 of this document.
Erste Group CEE Macro/Fixed Income Daily

Page 4