July 21, 2020 / 9:34 AM / 25 days ago

CEE MARKETS-Stocks, currencies rise on EU stimulus; focus on Hungarian cbank

    By Anita Komuves
    BUDAPEST, July 21 (Reuters) - Central European currencies
and stocks firmed on Tuesday, as European Union leaders struck a
deal on the 750 billion euro coronavirus recovery fund at a
summit that lasted almost five days.    
    Eurozone shares hit their highest since early March after EU
leaders agreed on the stimulus package. Encouraging results from
several COVID-19 vaccine trials also supported the broader
market sentiment.
    CEE stocks tracked eurozone assets, with Warsaw's blue chip
index leading gains, up 0.9% by 0811 GMT. Prague's
assets strengthened 0.7% while Budapest was up
0.3%. Bucharest's stocks firmed 0.5%.
    The Czech crown was up 0.18% on the day, touching
a one-month high, trading at 26.573 versus the euro. The Polish
zloty edged up 0.08% to 4.452 to the common currency. 
    The Hungarian forint strengthened 0.17% to 351.900
to the euro as markets were eyeing the rate-setting meeting of
the central bank later on Tuesday. 
    The bank is expected to cut its base rate by 15 basis points
to 0.6% at the meeting, according to a Reuters poll of analysts.

    Markets will be watching whether the statement of the bank,
to be published at 1300 GMT, will signal the possibility of
further monetary easing in the long term, Equilor said in a
client note.
    "If there is only a rate cut, and no signs of further
easing, then we expect only a small move in the forint's
exchange rate," they added.  
    Market focus would be on forward guidance and odds for
further cuts so any firm dovish hint in the MPC statement may
surprise markets, Citibank said in a note.
    "We believe the NBH's optimistic growth forecast projecting
a strong rebound in H2 2020 poses downside risks to the interest
rate outlook."
    Hungarian annual headline inflation was 2.9% in June while
core inflation came in at 4%. The NBH targets 3% headline
inflation with a tolerance band of a percentage point on either
side.
    
                   CEE      SNAPSHO   AT                      
                   MARKETS  T        1011              
                                     CET               
                            CURRENC                           
                            IES                        
                            Latest   Previou  Daily    Change
                                     s                 
                            bid      close    change   in 2020
 EURCZK  Czech     <EURCZK  26.5730  26.6200   +0.18%   -4.29%
 =       crown     =>                                  
 EURHUF  Hungary   <EURHUF  351.900  352.500   +0.17%   -5.90%
 =       forint    =>             0        0           
 EURPLN  Polish    <EURPLN   4.4520   4.4555   +0.08%   -4.39%
 =       zloty     =>                                  
 EURRON  Romanian  <EURRON   4.8410   4.8415   +0.01%   -1.09%
 =       leu       =>                                  
 EURHRK  Croatian  <EURHRK   7.5300   7.5335   +0.05%   -1.12%
 =       kuna      =>                                  
 EURRSD  Serbian   <EURRSD  117.500  117.620   +0.10%   +0.06%
 =       dinar     =>             0        0           
         Note:     calculated from            1800            
         daily                                CET      
         change                                        
                                                              
                            Latest   Previou  Daily    Change
                                     s                 
                                     close    change   in 2020
 .PX     Prague              959.14  952.850   +0.66%  -14.03%
                                           0           
 .BUX    Budapest           35298.8  35181.6   +0.33%  -23.40%
                                  6        9           
 .WIG20  Warsaw    <.WIG20  1856.66  1840.60   +0.87%  -13.65%
                   >                                   
 .BETI   Buchares           8534.25  8489.21   +0.53%  -14.46%
         t                                             
 .SBITO  Ljubljan  <.SBITO   857.54   868.57   -1.27%   -7.38%
 P       a         P>                                  
 .CRBEX  Zagreb    <.CRBEX  1602.67  1592.21   +0.66%  -20.56%
                   >                                   
 .BELEX  Belgrade  <.BELEX   658.88   658.88   +0.00%  -17.81%
 15                15>                                 
 .SOFIX  Sofia     <.SOFIX   441.74   442.02   -0.06%  -22.25%
                   >                                   
                                                              
                            Yield    Yield    Spread   Daily
                            (bid)    change   vs Bund  change
                                                       in
         Czech                                         spread
         Republic                                      
 CZ2YT=    2-year  <CZ2YT=   0.1340   0.0890   +080bp    +9bps
 RR                RR>                              s  
 CZ5YT=    5-year  <CZ5YT=   0.4210  -0.0580   +109bp    -5bps
 RR                RR>                              s  
 CZ10YT            <CZ10YT   0.9080   0.0580   +137bp    +5bps
 =RR     10-year   =RR>                             s  
         Poland                                               
 PL2YT=    2-year  <PL2YT=   0.1310   0.0050   +080bp    +1bps
 RR                RR>                              s  
 PL5YT=    5-year  <PL5YT=   0.7890   0.0050   +146bp    +1bps
 RR                RR>                              s  
 PL10YT            <PL10YT   1.3470   0.0070   +181bp    +0bps
 =RR     10-year   =RR>                             s  
                   FORWARD                                    
                            3x6      6x9      9x12     3M
                                                       interba
                                                       nk
         Czech     <CZKFRA     0.31     0.31     0.33     0.34
         Rep       ><PRIBO                             
                   R=>                                 
         Hungary   <HUFFRA     0.62     0.60     0.58     0.70
                   ><BUBOR                             
                   =>                                  
         Poland    <PLNFRA     0.20     0.21     0.24     0.25
                   ><WIBOR                             
                   =>                                  
         Note:     are for ask                                
         FRA       prices                              
         quotes                                        
 

 (Additional reporting by Robert Muller in Prague; Editing by
Rashmi Aich)
  
 
 
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