CEE MARKETS – Polish zloty rallies as fears of escalation following missile launch ease

(Price update, adds new details) By Luiza Ilie and Jason Hovet BUCHAREST, Nov 16 (Reuters) – The Polish zloty rallied on Wednesday as tensions eased over a missile that killed two people in Poland on Tuesday near the border between the NATO member and Ukraine, shaking market confidence. The missile strike amplified concerns over the war in Ukraine after the Russian invasion could spill over into neighboring countries, pushing the zloty to a three-week low in overnight trading. On Wednesday, US President Joe Biden told his allies the missile came from Ukrainian air defense, a NATO source said. Polish President Andrzej Duda later said there was “a high probability” the rocket was used by Ukrainian forces and there was no evidence it was launched by Russia. The zloty was down 0.3% on the day at 4.70 against the euro at 1124 GMT, after an overnight low of around 4.78. Warsaw‘s prime index remained down 1.6%. Biden has said publicly that it was “unlikely” the missile was fired from Russia. If confirmed, it would likely allay fears that the first deadly incident in a NATO country since the start of the war in Ukraine could lead to an escalation. Markets were also watching for a suspension of oil deliveries to Central and Eastern Europe via a section of the Druzhba pipeline, for technical reasons in Ukraine. “The only negative thing about the markets today is that there is this uncertainty around the oil supply. Everyone is hoping that this will be corrected as soon as possible,” said an FX trader in Budapest. . The Hungarian MOL said its Ukrainian partner told it that a Russian rocket had hit a power plant that supplies electricity to a pumping station. Russian pipeline operator Transneft said Ukraine did not plan to resume oil pumping through the Druzhba pipeline on Wednesday, TASS news agency reported. MOL shares fell about 1%. The Budapest and Prague indices fell 0.65% and 0.1% respectively, while Bucharest rose 1.2%. The Hungarian forint was stable on the day while the Czech koruna and Romanian leu were also little changed. The forint, which has lost more than 9% so far in 2022 to make it the worst performing currency in Central Europe, had fallen as low as 413.80 to the euro, but was trading at 407.0 to the euro midday, 1.7% firmer than the overnight lows. CEE MARKET OVERVIEW T 1224 CET CURRENC IES Last previous daily change in 2022 EURCZK Czech EURHUF Hungary 0 0 EURPLN Polish EURRON Romanian EURHRK Croatian EURRSD Serbian 0 0 Note : calculated from 1800 CET Last previous daily change in 2022 . PX Prague 1245.30 1246.81 -0.12% #VALUE! 00 .BUX Budapest 44020.7 44308.2 -0.65% -13.21% 8 9 .WIG20 Warsaw <.WIG20 1738.13 1769.55 -1.78% -23.33% > .BETI Buchares 11797.8 11656.5 +1.21% -9.67% t 0 3 11656.5 1073.81 -0.01% -14.48% P to P> .CRBEX Zagreb <.CRBEX 1897.76 1907.00 -0.48% -8.73% > .BELEX Belgrade <.BELEX 810.27 800.46 +1.23% -1.28% 15 15> .SOFIX Sofia <.SOFIX 591.71 595,14 -0,58 % -6,92 % > Yield Yield Spread Daily change (bid) vs Bund spread change Czech Republic CZ2YT= 2 years s CZ5YT= 5 years s CZ10YT s Poland PL2YT= 2 years s PL5YT= 5 years s PL10YT s FORWARD 3×6 6×9 9×12 3M interba nk Czech Hungary Poland Note: are for asking prices FRA ****************************** ************ ** ****************** (Reporting by Luiza Ilie in Bucharest, Anita Komuves in Budapest, Jason Hovet in Prague and Anna Wlodarczak-Semczuk in Warsaw; Editing by Jason Hovet, Elaine Hardcastle and Alexander Smith)

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