May 13, 2020 / 9:41 AM / in 16 days

CEE MARKETS-Currencies, most stocks slip ahead of U.S. Fed chief speech

    By Alan Charlish
    WARSAW, May 13 (Reuters) - Central European currencies and
most stock markets fell on Wednesday, due to risk aversion on
worries over U.S.-China tensions and speculation that the U.S.
Federal Reserve could introduce negative interest rates.
    Federal Reserve Chairman Jerome Powell will be speaking in a
webcast hosted by the Peterson Institute for International
Economics at 1300 GMT. 
    U.S. President Donald Trump on Tuesday again pushed the Fed
to adopt negative rates as data showed that U.S. consumer prices
dropped 0.8% in April, the biggest decline since the Great
Recession.
    "It's a mild risk aversion due to the relations between
China and the U.S. but also everyone is expecting Jerome
Powell's speech... will Jerome Powell say something about the
possibility of negative interest rates in the U.S.?," said
Mateusz Sutowicz, financial market analyst at Bank Millennium.
    At 0858 GMT, the Polish zloty was down 0.20% at
4.5662. The Czech crown was down 0.44% at 27.529 and
the Hungarian forint was down 0.66% at 353.13.
    "We have a small motion of risk aversion... but you must
remember that this is still a very light market, no big flows,
just short-term players following global sentiment," said a
Warsaw-based currency trader.
    Stocks were mostly lower, with the main indices in Prague
 and Budapest falling 0.75% and 0.37%, respectively.
However, Warsaw's WIG 20 index was up 0.47%, with the
best performer mBank rising over 4%.
    "Today we have the second day of banks outperforming," said
Kamil Stolarski, head of equity research at Santander Bank,
Polska. "Someone's decided to have more exposure to Polish
banks... it started to happen in the middle of the day
yesterday."
    Benchmark Polish 10-year yields fell around 5
basis points to 1.362% ahead of another round of bond buying by
the central bank, designed to inject liquidity into a market hit
by the coronavirus outbreak.
    In Hungary, the central bank bought a total of 25 billion
forints ($76.74 million) worth of government bonds from local
lenders at its auction on Tuesday, half the amount it purchased
at its previous auction a week ago.
    Czech 10-year yields were down 6.5 basis points
at 0.967%. 
    Wednesday will see a Czech bond auction offering three
bonds, maturing in 2022, 2026 and 2031. 
    Short-dated bonds have seen the highest demand among
investors since borrowing ramped up to record levels in the past
two months, in which the finance ministry was selling several
times what was on offer. 
    
    
                   CEE      SNAPSHO   AT                      
                   MARKETS  T        1058              
                                     CET               
                                                              
                   CURRENC                                    
                   IES                                 
                            Latest   Previou  Daily    Change
                                     s                 
                            bid      close    change   in 2020
 EURCZK  Czech     <EURCZK  27.5290  27.4090   -0.44%   -7.62%
 =       crown     =>                                  
 EURHUF  Hungary   <EURHUF  353.130  350.785   -0.66%   -6.23%
 =       forint    =>             0        0           
 EURPLN  Polish    <EURPLN   4.5662   4.5572   -0.20%   -6.78%
 =       zloty     =>                                  
 EURRON  Romanian  <EURRON   4.8345   4.8295   -0.10%   -0.96%
 =       leu       =>                                  
 EURHRK  Croatian  <EURHRK   7.5700   7.5650   -0.07%   -1.65%
 =       kuna      =>                                  
 EURRSD  Serbian   <EURRSD  117.540  117.580   +0.03%   +0.03%
 =       dinar     =>             0        0           
         Note:     calculated from            1800            
         daily                                CET      
         change                                        
                                                              
                   STOCKS                                     
                            Latest   Previou  Daily    Change
                                     s                 
                                     close    change   in 2020
 .PX     Prague              883.96  890.610   -0.75%  -20.77%
                                           0           
 .BUX    Budapest           35012.6  35143.1   -0.37%  -24.02%
                                  6        3           
 .WIG20  Warsaw    <.WIG20  1630.10  1622.51   +0.47%  -24.18%
                   >                                   
 .BETI   Buchares           8278.78  8408.11   -1.54%  -17.02%
         t                                             
 .SBITO  Ljubljan  <.SBITO   803.34   807.38   -0.50%  -13.23%
 P       a         P>                                  
 .CRBEX  Zagreb    <.CRBEX  1544.38  1547.34   -0.19%  -23.45%
                   >                                   
 .BELEX  Belgrade  <.BELEX   680.43   673.94   +0.96%  -15.13%
 15                15>                                 
 .SOFIX  Sofia     <.SOFIX   452.09   451.78   +0.07%  -20.43%
                   >                                   
                                                              
                   BONDS                                      
                            Yield    Yield    Spread   Daily
                            (bid)    change   vs Bund  change
                                                       in
         Czech                                         spread
         Republic                                      
 CZ2YT=    2-year  <CZ2YT=   0.3650   0.0630   +110bp    +7bps
 RR                RR>                              s  
 CZ5YT=    5-year  <CZ5YT=   0.4630  -0.0190   +119bp    -1bps
 RR                RR>                              s  
 CZ10YT            <CZ10YT   0.9670  -0.0650   +149bp    -5bps
 =RR     10-year   =RR>                             s  
         Poland                                               
 PL2YT=    2-year  <PL2YT=   0.5340  -0.0280   +127bp    -3bps
 RR                RR>                              s  
 PL5YT=    5-year  <PL5YT=   0.9670  -0.0400   +170bp    -3bps
 RR                RR>                              s  
 PL10YT            <PL10YT   1.3620  -0.0530   +189bp    -4bps
 =RR     10-year   =RR>                             s  
                                                              
                   FRA                                        
                            3x6      6x9      9x12     3M
                                                       interba
                                                       nk
         Czech     <CZKFRA     0.24     0.25     0.24     0.35
         Rep       ><PRIBO                             
                   R=>                                 
         Hungary   <HUFFRA     1.36     1.31     1.25     1.07
                   ><BUBOR                             
                   =>                                  
         Poland    <PLNFRA     0.31     0.28     0.31     0.68
                   ><WIBOR                             
                   =>                                  
         Note: FRA quotes are for                             
         ask prices                                    
         ********************************************         
         ******************                            
                                                              
 

($1 = 325.7600 forints)

 (Reporting by Alan Charlish in Warsaw, Jason Hovet in Prague
and Anita Komuves in Budapest; Editing by Rashmi Aich)
  
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