March 24, 2020 / 10:59 AM / in 6 days

CEE MARKETS-Stocks and currencies rise after Fed unveils stimulus

    WARSAW, March 24 (Reuters) - Central European shares bounced
in early trade on Tuesday and currencies firmed, after the U.S.
Federal Reserve rolled out extraordinary measures to support the
coronavirus-hit economy and as investors awaited a Hungarian
rates decision.
    On Monday the Fed said it would back purchases of corporate
bonds, backstop direct loans to companies and expand its asset
purchases by as much as needed to stabilise financial markets.

    A Warsaw-based equity trader said all markets were
rebounding, mostly because of the Fed's decision.
    At 1018 GMT Warsaw's blue-chip WIG 20 index was up
3.79%, Prague's PX index was up 7.08% and Budapest's main
index was up 5.16%.
    Currencies also got a boost, with the Polish zloty
gaining 0.43% against the euro to 4.5913, the Czech crown
 rising 0.39% to 27.73, the Hungarian forint
gaining 0.65% at 350.05 and the Romanian leu up 0.05%
at 4.848.
    "Tuesday morning trading on the FX market brings a slight
improvement in the global mood, which is partly related to the
Fed's decision yesterday," DM BOS analyst Konrad Ryczko said.
    In Hungary, the central bank's Monetary Policy Council (MPC)
is scheduled to announce its rates decision at 1300 GMT, with
analysts polled by Reuters expecting the cost of borrowing to
remain unchanged at 0.90%.
    Hungary's central bank had been under pressure to tighten
policy because of rising inflation, but the coronavirus outbreak
has changed the terms of the monetary policy debate, with
central banks around the world cutting rates.
    "We shall wait to see if policymakers will add any further
monetary stimulus today, but if they do not, they could well do
so at an inter-meeting as the situation evolves – hence, there
is limited interest surrounding today's MPC meeting," said Tatha
Ghose Senior EM Economist at Commerzbank.
    Polish benchmark 10-year bond yields were down 8 basis
points at 1.805%.
    On Monday, Poland's central bank repurchased bonds worth 5.6
billion zlotys, the second such operation in as many weeks, to
try to support the economy during the coronavirus
outbreak.
    Czech 10-year yields were down just under 2 basis points at
1.6420%. 
    
    
            CEE        SNAPSHOT   AT                         
            MARKETS              1118 CET            
                       CURRENCI                              
                       ES                            
                       Latest    Previous  Daily     Change
                       bid       close     change    in 2020
 Czech                  27.7300   27.8395    +0.39%    -8.29%
 crown                                               
 Hungary               350.0500  352.3200    +0.65%    -5.40%
 forint                                              
 Polish                  4.5913    4.6113    +0.43%    -7.29%
 zloty                                               
 Romanian                4.8480    4.8503    +0.05%    -1.23%
 leu                                                 
 Croatian                7.6125    7.6014    -0.15%    -2.20%
 kuna                                                
 Serbian               117.5200  117.5500    +0.03%    +0.04%
 dinar                                               
 Note:      calculated from                1800 CET          
 daily                                               
 change                                              
                                                             
                       Latest    Previous  Daily     Change
                                 close     change    in 2020
 Prague                  790.52  738.2800    +7.08%   -29.14%
 Budapest              32441.60  30848.56    +5.16%   -29.60%
 Warsaw                 1458.75   1405.45    +3.79%   -32.15%
 Bucharest              7309.57   7038.95    +3.84%   -26.74%
 Ljubljana               705.64    685.52    +2.93%   -23.79%
 Zagreb                 1395.80   1364.98    +2.26%   -30.81%
 Belgrade   <.BELEX15    618.78    606.62    +2.00%   -22.82%
            >                                        
 Sofia                   414.63    406.90    +1.90%   -27.02%
                                                             
                       Yield     Yield     Spread    Daily
                       (bid)     change    vs Bund   change
                                                     in
 Czech                                               spread
 Republic                                            
   2-year   <CZ2YT=RR    1.4100    0.0540   +207bps     +2bps
            >                                        
   5-year   <CZ5YT=RR    1.3260   -0.2410   +187bps    -25bps
            >                                        
   10-year  <CZ10YT=R    1.6420   -0.0180   +200bps     -3bps
            R>                                       
 Poland                                                      
   2-year   <PL2YT=RR    0.9570    0.0220   +162bps     -1bps
            >                                        
   5-year   <PL5YT=RR    1.3480   -0.0740   +189bps     -8bps
            >                                        
   10-year  <PL10YT=R    1.8050   -0.0800   +217bps    -10bps
            R>                                       
            FORWARD                                          
                       3x6       6x9       9x12      3M
                                                     interban
                                                     k
 Czech Rep          <      0.72      0.34      0.27      1.76
            PRIBOR=>                                 
 Hungary            <      0.44      0.38      0.32      0.55
            BUBOR=>                                  
 Poland             <      0.51      0.39      0.35      1.18
            WIBOR=>                                  
 Note: FRA  are for ask prices                               
 quotes                                              
 **************************************************          
 ************                                        
 
 (Reporting by Alan Charlish in Warsaw and Anita Komuves in
Budapest; editing by Barbara Lewis)
  
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