Edition:
India

Anita Komuves

CEE MARKETS-Stocks, currencies higher despite dismal economic data

3:40pm IST

By Anita Komuves BUDAPEST, June 5 Central European stocks and currencies rose on Friday as optimism returned to markets after the European Central Bank announced a boost of its stimulus program to mitigate the fall-out from the coronavirus pandemic. Assets firmed even as fresh data showed the lockdown measures introduced to stop the spread of the virus have hammered regional economies. Hungary's industrial output plunged by an annual rate of 36.8% in April, with car factories virtually halting production. Czech retail sales slumped by 10.6% year-on-year in April, the worst result on record. The crisis caused by the virus weakened currencies in the region as well, but the recent risk-on mood helped them regain a significant part of their losses. The Czech crown, the Polish zloty and the Hungarian forint each gained more than 0.2% on Friday while the Romanian leu was stable. A Reuters poll on Friday showed that the Czech crown should gain the most among central European currencies over the next year as economies recover. Over the next 12 months, the crown was seen gaining 3.6% to 25.705 to the euro. The forint was trading at 343.95 against the euro on Friday, up 0.23%. "Since the unexpected rate cut of the Polish central bank, there has been a heavy trade flow in the zloty-forint pair, which keeps the forint at its current (firmer) level", an FX trader in Budapest said. "The forint is also waiting to hear from the national bank about the policy direction they want to take," he said. Marton Nagy, deputy governor of the NBH, unexpectedly resigned last week. The bank's managing director, Barnabas Virag, has been nominated to replace him, sources told Reuters on Friday. Poland's nationalist government won a vote of confidence in parliament on Thursday which it unexpectedly called to shore up its authority before a presidential election, prompting a slide in the zloty. "The zloty managed to weaken as sharply as it had strengthened towards the beginning of the week," a note from Commerzbank said, adding that the currency simply could have entered a high volatility period. The zloty was trading at 4.428 versus the euro on Friday, up 0.23% on the day. CEE SNAPSHOT AT 0954 MARKETS CET CURRENCIE S Latest Previous Daily Change bid close change in 2020 Czech crown 26.5800 26.6330 +0.20% -4.32% Hungary 343.9500 344.7500 +0.23% -3.72% forint Polish 4.4280 4.4383 +0.23% -3.88% zloty Romanian 4.8390 4.8380 -0.02% -1.05% leu Croatian 7.5690 7.5723 +0.04% -1.63% kuna Serbian 117.5400 117.6100 +0.06% +0.03 dinar % Note: daily calculated from 1800 change CET Latest Previous Daily Change close change in 2020 Prague 947.97 932.4200 +1.67% -15.03 % Budapest 37612.11 37260.06 +0.94% -18.38 % Warsaw 1817.50 1786.58 +1.73% -15.47 % Bucharest 8979.02 9021.60 -0.47% -10.01 % Ljubljana 879.38 873.24 +0.70% -5.02% Zagreb 1673.94 1673.10 +0.05% -17.03 % Belgrade 678.01 678.32 -0.05% -15.43 % Sofia 462.36 462.10 +0.06% -18.62 % BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year 0.1150 0.0290 +071bp +1bps s 5-year 0.4940 0.0110 +104bp -1bps s 10-year <CZ10YT=RR 0.9130 0.0820 +121bp +6bps > s Poland 2-year 0.2390 0.0070 +083bp -1bps s 5-year 0.8150 0.0250 +136bp +0bps s 10-year <PL10YT=RR 1.4140 0.0260 +171bp +0bps > s FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M interb ank Czech Rep <P 0.26 0.29 0.33 0.34 RIBOR=> Hungary <B 0.79 0.76 0.71 0.90 UBOR=> Poland <W 0.25 0.25 0.25 0.27 IBOR=> Note: FRA are for ask prices quotes (Additional reporting by Alan Charlish in Warsaw Editing by Mark Heinrich)

CEE MARKETS-Stocks rise, currencies stable on economic hope

03 Jun 2020

By Anita Komuves BUDAPEST, June 3 Central European stocks rose on Wednesday and currencies held on to their gains as the lifting of lockdown measures and hopes of more economic stimulus measures fueled global market optimism. The economic crisis caused by the coronavirus pandemic had hammered currencies in the region, but a new risk-on mood has helped them to recoup a significant part of their losses. Most CEE currencies were stable. The forint eased 0.14% on the day and was trading at 345.90 versus the euro, but was still around its strongest since late March, when lockdown measures were introduced. "The general risk-on mood strengthened the forint as far as 345 to the euro from the levels of 350," and FX trader in Budapest said. "This is not specific to the forint, even the zloty is firming despite the unexpected rate cut." The Polish zloty was little changed at 4.385 versus the euro on Wednesday, after a more than 1.4% jump last Tuesday, before the central bank announced a surprise 40-basis-point rate cut to 0.1% on Thursday. "The 200-day moving average currently resides near 4.36. EURPLN has then reached the levels at which we expect consolidation (pause) for some time," Santander Bank Polska wrote in a note. The Czech crown was at 26.560 versus the euro, up 0.06% on the day. A client note from Commerzbank expected "moderate CZK appreciation". Stock markets across the region firmed, with Budapest leading gains and adding near 2% by 0818 GMT. OTP Bank , the bourse's most liquid paper, added 4%, or more than 40% since hitting a two-year low at the height of the pandemic crisis. Prague's equities gained 0.2% as London- and Prague-listed antivirus software maker Avast was expected to join the FTSE 100 index. CEE SNAPSHOT AT MARKETS 1018 CET CURRENCIE S Latest Previous Daily Change bid close change in 2020 Czech 26.5600 26.5770 +0.06% -4.25% crown Hungary 345.9000 345.4200 -0.14% -4.27% forint Polish 4.3850 4.3865 +0.03% -2.93% zloty Romanian 4.8360 4.8370 +0.02% -0.99% leu Croatian 7.5750 7.5825 +0.10% -1.71% kuna Serbian 117.5600 117.6300 +0.06% +0.01% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2020 Prague 923.46 921.8200 +0.18% -17.23% Budapest 36658.87 35967.41 +1.92% -20.45% Warsaw 1768.39 1736.36 +1.84% -17.75% Bucharest 8950.35 8814.37 +1.54% -10.29% Ljubljana 856.23 844.24 +1.42% -7.52% Zagreb 1663.25 1650.99 +0.74% -17.56% Belgrade <.BELEX15 677.74 673.81 +0.58% -15.46% > Sofia 458.18 461.03 -0.62% -19.35% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 0.1450 0.0870 +079bps +8bps > 5-year <CZ5YT=RR 0.3850 -0.0440 +098bps -7bps > 10-year <CZ10YT=R 0.7740 0.0670 +116bps +4bps R> Poland 2-year <PL2YT=RR 0.2500 0.0070 +090bps +0bps > 5-year <PL5YT=RR 0.7710 0.0080 +137bps -1bps > 10-year <PL10YT=R 1.3110 0.0130 +169bps -2bps R> FORWARD 3x6 6x9 9x12 3M interban k Czech Rep < 0.25 0.26 0.29 0.34 PRIBOR=> Hungary < 0.77 0.72 0.67 0.91 BUBOR=> Poland < 0.25 0.26 0.27 0.28 WIBOR=> Note: FRA are for ask prices quotes *************************************************** *********** (Additional reporting by Jason Hovet in Prague and Alan Charlish in Warsaw; editing by Barbara Lewis)

CEE MARKETS-Stocks firm, zloty extends gains ahead of central bank meeting

27 May 2020

By Anita Komuves BUDAPEST, May 27 Central European stocks firmed amid a greater global appetite for risk while the Polish zloty extended gains as investors closed positions against the currency and no rate cut was expected at Thursday's central bank meeting. The zloty gained 0.42% on Wednesday and was trading at 4.419 to the euro, outperforming its regional peers. The zloty jumped 1.4% on Tuesday, hitting a 10-week high fuelled by an upbeat sentiment in global markets and the breaking of a technical level, analysts said. "Many, many, many positions against the zloty were washed out yesterday and today we are trying to stabilise," a Warsaw-based currency trader said. "There was a support at 4.4230 broken." With this jump the Polish currency gained back more than half its losses since the end of February, after the coronavirus pandemic hit Central European markets. The Polish central bank will hold a rate-meeting on Thursday, where it is expected to hold rates. Mateusz Sutowicz, a financial market analyst at Bank Millennium in Warsaw said the lower probability of rate cuts also helped the zloty. The forint firmed 0.06% on the day, trading at 348.80 versus the euro, after the Hungarian central bank left its interest rates unchanged on Tuesday and said it would use bond purchases sparingly. The currency has been stable near the 350-level since it regained some of its strength after hitting a record low near 370 on April 1. Policy tightening by the previously ultra-dovish bank last month and the moderate QE program of the NBH helped the forint. The bank bought only 9.98 billion forints ($31.27 million) worth of government bonds from local banks on Tuesday, the lowest amount since launching its QE program. "The data are a mild hawkish surprise and therefore, positive for the forint," Commerzbank said in a note. "It confirms that the MPC are happy with progress of yield levels and the exchange rate in recent weeks." CEE SNAPSHOT AT MARKETS 0943 CET CURRENCIE S Latest Previous Daily Change bid close change in 2020 Czech 27.0550 27.0700 +0.06% -6.00% crown Hungary 348.8000 349.0200 +0.06% -5.06% forint Polish 4.4190 4.4375 +0.42% -3.68% zloty Romanian 4.8430 4.8415 -0.03% -1.13% leu Croatian 7.5850 7.5835 -0.02% -1.84% kuna Serbian 117.5500 117.6100 +0.05% +0.02% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2020 Prague 903.39 901.1500 +0.25% -19.02% Budapest 36297.83 36085.77 +0.59% -21.23% Warsaw 1719.75 1709.71 +0.59% -20.01% Bucharest 8713.43 8705.75 +0.09% -12.67% Ljubljana 819.39 820.73 -0.16% -11.50% Zagreb 1616.40 1611.69 +0.29% -19.88% Belgrade <.BELEX15 669.21 669.21 +0.00% -16.53% > Sofia 451.05 451.56 -0.11% -20.61% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 0.1030 0.0000 +075bps +0bps > 5-year <CZ5YT=RR 0.3890 -0.0680 +103bps -5bps > 10-year <CZ10YT=R 0.8110 0.0330 +125bps +5bps R> Poland 2-year <PL2YT=RR 0.5470 -0.0030 +120bps +0bps > 5-year <PL5YT=RR 0.9420 -0.0190 +158bps +0bps > 10-year <PL10YT=R 1.4100 -0.0120 +185bps +1bps R> FORWARD 3x6 6x9 9x12 3M interban k Czech Rep < 0.26 0.27 0.29 0.34 PRIBOR=> Hungary < 0.93 0.89 0.86 0.95 BUBOR=> Poland < 0.42 0.34 0.35 0.68 WIBOR=> Note: FRA are for ask prices quotes *************************************************** *********** (Additional reporting by Alan Charlish in Warsaw)

CEE MARKETS-Currencies mixed as investors await central bank meetings

25 May 2020

By Anita Komuves BUDAPEST, May 25 Central European currencies were mixed on Monday as investors awaited central bank meetings in Hungary, Poland and Romania later this week, although most analysts do not expect any change in interest rates. The Polish, Czech and the Romanian central banks have cut rates in the past two months to help their economies, which have been hit by lockdowns introduced to fight the coronavirus pandemic. The National Bank of Hungary (NBH) tightened its previously ultra-dovish policy in April to stabilize the forint and started a quantitative easing programme in May to stimulate the economy. The NBH holds its rate-setting meeting on Tuesday and a Reuters poll expects it to keep rates on hold. "The NBH could spend the next period waiting to see more clearly the inflation and growth prospects for the second half of the year," CIB Bank said in a note. The forint traded at 350.85 early on Monday, easing 0.09% from the previous session. The central bank of Poland (NBP) holds its rate-setting meeting on Thursday. "The NBP will take a wait-and-see approach after it cut rates against expectations in the last MPC meeting and initiated government and state-guaranteed bond purchases, waiting for more data and clarity on the economic outlook," Goldman Sachs wrote in a research note. The Polish zloty was up by 0.05% and was trading at 4.5165 versus the euro on Monday. The Romanian central bank will also likely meet later this week. A majority of analysts polled by Reuters expect the bank to keep rates on hold in May, but see the bank cutting rates further this year. The Czech crown was down 0.1% and trading at 27.331, but still holding onto its gains last week. A dealer in Prague expected a "lazy trading day" with the UK and US markets closed for public holidays. CEE SNAPSHOT AT MARKETS 0943 CET CURRENCIE S Latest Previous Daily Change bid close change in 2020 Czech 27.3310 27.3050 -0.10% -6.95% crown Hungary 350.8500 350.5500 -0.09% -5.62% forint Polish 4.5165 4.5188 +0.05% -5.76% zloty Romanian 4.8420 4.8425 +0.01% -1.11% leu Croatian 7.5780 7.5873 +0.12% -1.75% kuna Serbian 117.5000 117.5800 +0.07% +0.06% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2020 Prague 877.08 877.0100 +0.01% -21.38% Budapest 35074.50 35050.92 +0.07% -23.89% Warsaw 1637.59 1630.44 +0.44% -23.84% Bucharest 8646.49 8592.48 +0.63% -13.34% Ljubljana 813.57 811.90 +0.21% -12.13% Zagreb 1570.91 1569.77 +0.07% -22.13% Belgrade <.BELEX15 669.94 669.94 +0.00% -16.43% > Sofia 450.22 450.22 +0.00% -20.76% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 0.1250 -0.0220 +081bps -1bps > 5-year <CZ5YT=RR 0.3690 -0.0700 +106bps -6bps > 10-year <CZ10YT=R 0.7950 0.0180 +130bps +3bps R> Poland 2-year <PL2YT=RR 0.5620 0.0080 +125bps +2bps > 5-year <PL5YT=RR 0.9740 -0.0080 +166bps +1bps > 10-year <PL10YT=R 1.4200 -0.0190 +192bps -1bps R> FORWARD 3x6 6x9 9x12 3M interban k Czech Rep < 0.25 0.26 0.29 0.34 PRIBOR=> Hungary < 0.83 0.79 0.74 0.98 BUBOR=> Poland < 0.42 0.37 0.37 0.68 WIBOR=> Note: FRA are for ask prices quotes *************************************************** *********** (Additional reporting by Jason Hovet in Prague, Alan Charlish in Warsaw and Luiza Ilie and Radu-Sorin Marinas in Bucharest Editing by Susan Fenton)

Hungary tightens asylum rules as it ends migrant detention zones

21 May 2020

BUDAPEST Hungary shut so-called migrant transit zones on its borders on Thursday, freeing some 300 refugees from prison-like conditions while at the same time hardening rules which will effectively bar future asylum applicants.

CEE MARKETS-Stocks fall as new data reveals scale of virus hit

21 May 2020

By Anita Komuves BUDAPEST, May 21 Central European stock markets eased on Thursday as markets around the world switched into risk-off mood and fresh data in the region showed the devastating effects of the pandemic, with Polish industrial output dropping 24.7% year-on-year in April. The export-driven economies of the CEE region have been hit hard by the lockdown measures introduced to curb the spread of the coronavirus. The International Monetary Fund forecast that economies in the region will contract by 3% to 7% this year due to the pandemic. Equities in the region were down with Prague's blue chip index leading losses by dropping 0.74% by 0726 GMT. Warsaw was down 0.4% while Budapest eased 0.3%. Bucharest's stock market was down 0.2%. Currencies were mostly stable with the Czech crown firming 0.3% to 27.230 versus the euro. The Polish zloty and the Romanian leu were little moved. The Hungarian forint firmed 0.06% to 349.650 against the euro. The currency has been trading near the 350 level for the past few sessions. "The international mood and possible further steps from the NBH could give a new direction to the forint," an FX trader in Budapest said. "Many people expect policy loosening from the central bank sooner or later, a lowering of the interest rate on the one-week deposit tender, or that the bank accepts a smaller amount of bids to boost liquidity," he added. The NBH holds its one-week deposit tender later today. The NBH has been offering the facility at the 0.9% since it was introduced. In a Reuters poll some economists said the bank might lower the interest rate on the facility later this year if the forint remains stable and the scale of damage to the economy from the pandemic gets clearer. ** For an interactive graphic on CEE economic developments: https://reut.rs/3exsJHO CEE SNAPSHO AT MARKETS T 0926 CET CURRENC IES Latest Previou Daily Change s bid close change in 2020 EURCZK Czech <EURCZK 27.2300 27.3200 +0.33% -6.60% = crown => EURHUF Hungary <EURHUF 349.650 349.850 +0.06% -5.29% = forint => 0 0 EURPLN Polish <EURPLN 4.5349 4.5352 +0.01% -6.14% = zloty => EURRON Romanian <EURRON 4.8440 4.8434 -0.01% -1.15% = leu => EURHRK Croatian <EURHRK 7.5750 7.5765 +0.02% -1.71% = kuna => EURRSD Serbian <EURRSD 117.530 117.570 +0.03% +0.03% = dinar => 0 0 Note: calculated from 1800 daily CET change Latest Previou Daily Change s close change in 2020 .PX Prague 872.10 878.570 -0.74% -21.83% 0 .BUX Budapest 35535.4 35635.5 -0.28% -22.89% 8 2 .WIG20 Warsaw <.WIG20 1646.26 1652.64 -0.39% -23.43% > .BETI Buchares 8403.91 8419.75 -0.19% -15.77% t .SBITO Ljubljan <.SBITO 809.74 809.74 +0.00% -12.54% P a P> .CRBEX Zagreb <.CRBEX 1581.30 1581.30 +0.00% -21.62% > .BELEX Belgrade <.BELEX 673.50 673.50 +0.00% -15.99% 15 15> .SOFIX Sofia <.SOFIX 448.91 449.45 -0.12% -20.99% > Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT= 2-year <CZ2YT= 0.1250 -0.0080 +080bp +0bps RR RR> s CZ5YT= 5-year <CZ5YT= 0.3750 -0.0770 +104bp -8bps RR RR> s CZ10YT <CZ10YT 0.8280 0.0370 +131bp +5bps =RR 10-year =RR> s Poland PL2YT= 2-year <PL2YT= 0.5410 -0.0230 +122bp -2bps RR RR> s PL5YT= 5-year <PL5YT= 0.9330 0.0000 +160bp +0bps RR RR> s PL10YT <PL10YT 1.3850 0.0000 +186bp +1bps =RR 10-year =RR> s FORWARD 3x6 6x9 9x12 3M interba nk Czech <CZKFRA 0.23 0.24 0.25 0.34 Rep ><PRIBO R=> Hungary <HUFFRA 0.87 0.83 0.79 1.01 ><BUBOR => Poland <PLNFRA 0.40 0.37 0.37 0.68 ><WIBOR => Note: are for ask FRA prices quotes (Editing by Giles Elgood)

CEE MARKETS-Stocks, currencies rise on optimism over economies re-opening from virus freeze

18 May 2020

By Anita Komuves BUDAPEST, May 18 Central European stocks and currencies firmed on Monday, helped by a risk-on mood in global markets and further easing of lockdown measures in the region, raising hopes for economic recovery. The Hungarian government started easing restrictions in the capital on Monday morning. The government will submit a proposal to parliament on May 26 to end its special coronavirus emergency powers. "There is a modest optimism in markets due to the re-openings," a currency trader in Budapest said. "Economies could re-start a little bit, which could calm down markets." Regional currencies edged higher. The Polish zloty added 0.15% and was trading at 4.563 versus the euro. The Hungarian forint gained 0.11% and was trading at 354.100 to the euro. The Czech crown rose 0.22%. Czech health officials announced on Friday the country will take major steps to relax lockdown measures from May 25, opening restaurants, hotels and pools and allowing gatherings of hundreds of people. Poland has been steadily loosening some coronavirus restrictions in recent weeks, and Prime Minister Mateusz Morawiecki said on Saturday that miners in Silesia will be able to return to work this week. Some analysts said caution was still justified given the German economic data posted at the end of last week which signalled a gloomy outlook for the second quarter. "Given the revision to Germany's fourth quarter performance, Europe's largest economy is in a recession," Raiffeisen bank said in a note. "This is only an indication of the dire economic picture we will see in the second quarter. Hence, we remain cautious in the short-term with respect to CEE FX." Preliminary first-quarter GDP data on Friday showed that CEE economies, which have close trade links with the euro zone, primarily Germany, fell as much as 5% on a quarterly basis, indicating the initial impact of the lockdown measures. The numbers showed that the COVID-19 pandemic will undo several years of solid growth in a region with economies highly tuned to the car industry and exports. CEE stock markets firmed, with Budapest leading gains by adding 2.6% by 0919 GMT, helped by a rally of OTP Bank shares which jumped 5%. OTP executive chairman Sandor Csanyi said on Inforadio late on Friday that OTP would be profitable this year and the bank sector was stable, while the stock was undervalued. Warsaw was up 1.7% at 0800 GMT, Prague equities firmed 1.2% while Bucharest's blue chip index gained 0.9%. CEE SNAPSHOT AT MARKETS 0956 CET CURRENCIE S Latest Previous Daily Change bid close change in 2020 Czech 27.6550 27.7150 +0.22% -8.04% crown Hungary 354.1000 354.5000 +0.11% -6.48% forint Polish 4.5630 4.5700 +0.15% -6.72% zloty Romanian 4.8400 4.8415 +0.03% -1.07% leu Croatian 7.5590 7.5622 +0.04% -1.50% kuna Serbian 117.4700 117.5900 +0.10% +0.09% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2020 Prague 877.90 867.4400 +1.21% -21.31% Budapest 34692.35 34046.13 +1.90% -24.72% Warsaw 1599.29 1572.55 +1.70% -25.62% Bucharest 8248.49 8174.10 +0.91% -17.33% Ljubljana 821.11 815.47 +0.69% -11.31% Zagreb 1553.34 1546.46 +0.44% -23.00% Belgrade <.BELEX15 662.86 667.14 -0.64% -17.32% > Sofia 448.54 450.13 -0.35% -21.05% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 0.1120 -0.0420 +086bps -2bps > 5-year <CZ5YT=RR 0.3830 -0.0470 +113bps -2bps > 10-year <CZ10YT=R 0.9280 0.1470 +148bps +17bps R> Poland 2-year <PL2YT=RR 0.4970 -0.0020 +125bps +2bps > 5-year <PL5YT=RR 0.8540 0.0010 +160bps +3bps > 10-year <PL10YT=R 1.3030 -0.0060 +185bps +2bps R> FORWARD 3x6 6x9 9x12 3M interban k Czech Rep < 0.19 0.20 0.20 0.34 PRIBOR=> Hungary < 0.94 0.91 0.87 1.05 BUBOR=> Poland < 0.33 0.30 0.28 0.68 WIBOR=> Note: FRA are for ask prices quotes *************************************************** *********** (Additional reporting by Jason Hovet in Prague; Editing by Ramakrishnan M.)

CEE MARKETS-Stocks rise tracking rally in Western European equities

15 May 2020

By Anita Komuves BUDAPEST, May 15 Central European stock markets rose and most currencies edged higher on Friday, tracking a rally in Western European shares driven by positive economic data from China. The DAX index of Germany, Central Europe's biggest trading partner, rose 1.76% by 1022 GMT as data showed China's industrial production rose in April after having contracted since the start of the coronavirus outbreak. Preliminary first-quarter gross domestic product (GDP) data came in better than expected in nearly all the countries of Central Europe, despite the economic damage wrought by the pandemic. Hungary's growth rate halved to an annual 2.2% in the first quarter from 4.5% in the last quarter of 2019. Poland's GDP rose 1.9% year-on-year, while Romania's economy grew 2.4% on the year in the first quarter. The Czech GDP dropped by 3.6% in the first quarter, versus the previous three months, the steepest drop since the global financial crisis in 2009. "It is the extent of decline in Q2, and the extent of rebound in Q3 which the market is essentially interested in. Hence, today's data is likely to turn out to be FX neutral," Commerzbank said in a note. Hungarian Prime Minister Viktor Orban said he hopes the industrial manufacturing sector, which represents close to a third of the economy, will return to its pre-crisis expansion rate from June. Hungary's economy could accelerate in the second half and reverse an expected overall 3% drop in GDP this year with a growth of 4.8% in 2021, Finance Minister Mihaly Varga said in a statement. Currencies in the region firmed or held stable. The Polish zloty was up 0.26% and trading at 4.554 versus the euro, while the Hungarian forint gained 0.17%, firming to 353.700 versus the common currency. The Czech crown led gains, adding 0.58% to trade at 27.460 against the euro. The crown has lost 7.4% of its value versus the euro this year, the biggest loss among its regional peers. Central bank governor Jiri Rusnok said the Czech National Bank is not in a situation that would warrant interventions against the crown. Budapest's blue-chip index led gains, firming 1.28% by 0806 GMT. Warsaw was up 0.85%, while Bucharest gained 0.75%. Prague's equities gained 0.52%. CEE SNAPSHOT AT MARKETS 1006 CET CURRENCIE S Latest Previous Daily Change bid close change in 2020 Czech 27.4600 27.6200 +0.58% -7.39% crown Hungary 353.7000 354.3000 +0.17% -6.38% forint Polish 4.5540 4.5660 +0.26% -6.53% zloty Romanian 4.8385 4.8375 -0.02% -1.04% leu Croatian 7.5720 7.5733 +0.02% -1.67% kuna Serbian 117.5700 117.6200 +0.04% +0.00% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2020 Prague 863.45 858.9600 +0.52% -22.60% Budapest 34582.21 34144.57 +1.28% -24.96% Warsaw 1592.65 1579.16 +0.85% -25.93% Bucharest 8204.46 8143.54 +0.75% -17.77% Ljubljana 813.09 808.02 +0.63% -12.18% Zagreb 1551.74 1546.68 +0.33% -23.08% Belgrade <.BELEX15 668.10 662.11 +0.90% -16.66% > Sofia 449.51 449.51 +0.00% -20.88% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 0.1760 -0.0210 +093bps -1bps > 5-year <CZ5YT=RR 0.3390 0.0230 +109bps +3bps > 10-year <CZ10YT=R 0.9080 0.1730 +145bps +18bps R> Poland 2-year <PL2YT=RR 0.4990 -0.0030 +125bps +1bps > 5-year <PL5YT=RR 0.8850 -0.0050 +163bps +0bps > 10-year <PL10YT=R 1.2620 -0.0090 +180bps -1bps R> FORWARD 3x6 6x9 9x12 3M interban k Czech Rep < 0.19 0.18 0.21 0.35 PRIBOR=> Hungary < 0.93 0.90 0.86 1.05 BUBOR=> Poland < 0.32 0.28 0.29 0.68 WIBOR=> Note: FRA are for ask prices quotes *************************************************** *********** (Editing by Devika Syamnath)

CEE MARKETS-Stocks edge higher, crown underperforms in wake of central bank rate cut

12 May 2020

By Anita Komuves BUDAPEST, May 12 Central European currencies held stable and stock markets mostly edged higher even though global investor sentiment suffered from worries of a second coronavirus wave as lockdown measures are being lifted. Infection rates in Germany jumped and new clusters of infections appeared in China and South Korea. Currencies in the region were mostly stable, with the Czech crown underperfoming peers and losing 0.17% of its value to the euro on the day, trading at 27.556 versus the common currency. The Czech crown was weakened last week by the higher-than-expected 75-basis-point rate cut by the central bank, the third in a series of reductions aiming to mitigate the economic effect of the pandemic. The CNB is not ruling out using any tool at its disposal if it can no longer lower rates despite needing to ease monetary conditions further, board member Tomas Holub said on Monday. The Czech central bank on Monday cut its forecast for the 2020 public sector balance to a deficit of 4.8% of the GDP from an earlier estimate of a 0.3% surplus. The crown was further weakened by the fresh CNB forecasts and Holub's comments on Monday, according to a Commerzbank analyst note. "Further data is due for publication tomorrow (inflation) and on Friday (first Q1 GDP estimate), and once again things might get uncomfortable for koruna," the analysts added. Elsewhere, the forint was trading at 350.10 versus the euro, down 0.07% on the day. "The forint has settled on this narrow range between 348 and 352 to the euro in the past week," a trader in Budapest said. "It is waiting for a new impetus to start going into either direction, this could be fresh data about the Hungarian economy or a step from the central bank," he added. As economies are slowly starting to lift the lockdown measures, investors could start to be more influenced by national news besides developments in the pandemic, and differentiate between regions once again, the trader added. The forint has recently outperformed its regional peers as it was strengthened by the central bank's policy tightening and by the slow start of the NBH's QE program last week. The NBH is holding another tender today, and offered to buy additional amounts of the 2030/A, 2031/A and 2038/A government bond series from local lenders. Results will be announced at 1100 GMT. The bank bought 79 billion forints ($243.8 million) worth of government bonds from local banks last week, including 50 billion worth of the same three series at the inaugural tender. Most regional stock markets edged up by 0740 GMT. Budapest equities were up 0.18%, Warsaw gained 0.33% while Bucharest lost 0.35%. Prague's blue chip index led gains, adding 1% as utility company CEZ reported a jump in first-quarter net profit. Shares of CEZ were up 2.67% by 0900 GMT. CEE SNAPSHO AT MARKETS T 0940 CET CURRENC IES Latest Previou Daily Change s bid close change in 2020 EURCZK Czech <EURCZK 27.5560 27.5100 -0.17% -7.71% = crown => EURHUF Hungary <EURHUF 350.100 349.850 -0.07% -5.41% = forint => 0 0 EURPLN Polish <EURPLN 4.5570 4.5585 +0.03% -6.60% = zloty => EURRON Romanian <EURRON 4.8300 4.8287 -0.03% -0.86% = leu => EURHRK Croatian <EURHRK 7.5630 7.5623 -0.01% -1.55% = kuna => EURRSD Serbian <EURRSD 117.540 117.590 +0.04% +0.03% = dinar => 0 0 Note: calculated from 1800 daily CET change Latest Previou Daily Change s close change in 2020 .PX Prague 894.65 885.940 +0.98% -19.81% 0 .BUX Budapest 34969.6 34908.1 +0.18% -24.12% 4 2 .WIG20 Warsaw <.WIG20 1592.56 1587.31 +0.33% -25.93% > .BETI Buchares 8376.99 8406.04 -0.35% -16.04% t .SBITO Ljubljan <.SBITO 799.55 798.02 +0.19% -13.64% P a P> .CRBEX Zagreb <.CRBEX 1543.33 1544.34 -0.07% -23.50% > .BELEX Belgrade <.BELEX 667.62 667.62 +0.00% -16.72% 15 15> .SOFIX Sofia <.SOFIX 450.43 449.77 +0.15% -20.72% > Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT= 2-year <CZ2YT= 0.1550 -0.1950 +089bp -22bps RR RR> s CZ5YT= 5-year <CZ5YT= 0.3670 -0.2180 +107bp -25bps RR RR> s CZ10YT <CZ10YT 1.0200 -0.0510 +152bp -8bps =RR 10-year =RR> s Poland PL2YT= 2-year <PL2YT= 0.5720 0.0130 +131bp -1bps RR RR> s PL5YT= 5-year <PL5YT= 1.0510 -0.0180 +175bp -5bps RR RR> s PL10YT <PL10YT 1.5020 -0.0120 +200bp -4bps =RR 10-year =RR> s FORWARD 3x6 6x9 9x12 3M interba nk Czech <CZKFRA 0.27 0.29 0.30 0.87 Rep ><PRIBO R=> Hungary <HUFFRA 1.00 0.96 0.94 1.07 ><BUBOR => Poland <PLNFRA 0.32 0.33 0.37 0.68 ><WIBOR => Note: are for ask FRA prices quotes (Additional reporting by Jason Hovet in Prague)

CEE MARKETS-Stocks rise on optimism over economic reopening, GDP data eyed

11 May 2020

By Anita Komuves BUDAPEST, May 11 Central European currencies were stable and stocks rose on Monday with Budapest outperforming the region as the gradual lifting of lockdown measures boosted investor sentiment globally. Regional currencies gained less than 0.1% versus the euro on Monday. The zloty, the crown and the forint have all suffered since the coronavirus pandemic brought economic activity to a virtual halt. Analysts expect preliminary first-quarter gross domestic product data, to be published this week in the region, to be closely eyed by investors in the region's markets for clues about the extent of economic damage caused by the coronavirus outbreak. The International Monetary Fund forecasts that economies in the region will contract by 3% to 7% this year due to the pandemic. ** For an interactive graphic on CEE economic developments: https://reut.rs/3exsJHO "Domestic readings, if they surprise negatively... may increase expectations for further fiscal and monetary assistance in Poland, and thus put pressure on the zloty," PKO Bank wrote in a note. "Everyone is expecting macro data to be so bad these days that if data end up being just slightly better than expected, that will have a positive effect on markets," an FX trader in Budapest said. "The fact that the central bank is closely managing interest rates in Hungary is also helping the forint," he added. Helped by policy tightening by Hungary's previously ultra-dovish central bank, the forint has outperformed its peers and regained a significant share of its losses since April 1, when it hit a record low near 370 to the euro. The forint was trading at 349.25 to the euro on Monday, up 0.03% on the day. The forint was also helped last week by the slow start of the Hungarian central bank's QE program, where the NBH bought 50 billion forints ($155.35 million) worth of government bonds, half the amount it had set as a maximum of weekly purchases. Central bank Governor Gyorgy Matolcsy said in an interview on Sunday that the NBH will use the bond-buying scheme only to the extent necessary. According to a Reuters poll, economists expect most central European currencies to rebound or remain stable over the next 12 months. The Hungarian forint is forecast to be stable while the Polish zloty is expected to gain 3.3% against the euro. Analysts projected that the Czech crown would gain around 5.0% against the euro. Estimates for the poll were collected before the Czech central bank delivered a bigger-than-expected 75-basis-point rate cut last Thursday. The crown fell after the cut last week, the third in a series of big reductions. The crown was trading at 27.220 versus the euro on Monday, up 0.06% on the day. Stocks rose on Monday. Prague's blue-chip index gained 1% while both Warsaw and Bucharest were up 0.7%. Budapest equities were up 2.13% and leading gains in the region as pharma company Richter outperformed the wider market. Richter's shares were up 2.46% by 0909 GMT as JP Morgan raised its target price and changed its recommendation to overweight from neutral. The company reported an above-forecast first-quarter profit on Friday. CEE SNAPSHOT AT MARKETS 0925 CET CURRENCIE S Latest Previous Daily Change bid close change in 2020 Czech 27.2200 27.2360 +0.06% -6.57% crown Hungary 349.2500 349.3700 +0.03% -5.18% forint Polish 4.5460 4.5499 +0.09% -6.37% zloty Romanian 4.8270 4.8280 +0.02% -0.80% leu Croatian 7.5548 7.5558 +0.01% -1.45% kuna Serbian 117.4700 117.6100 +0.12% +0.09% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2020 Prague 890.03 881.3400 +0.99% -20.22% Budapest 35535.64 34796.13 +2.13% -22.89% Warsaw 1617.84 1606.50 +0.71% -24.75% Bucharest 8438.24 8381.20 +0.68% -15.43% Ljubljana 801.10 801.10 +0.00% -13.48% Zagreb 1542.74 1542.74 +0.00% -23.53% Belgrade <.BELEX15 661.60 661.60 +0.00% -17.47% > Sofia 448.82 448.82 +0.00% -21.00% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 0.2810 -0.0690 +104bps -9bps > 5-year <CZ5YT=RR 0.5250 -0.0810 +126bps -10bps > 10-year <CZ10YT=R 1.1320 0.0200 +165bps +1bps R> Poland 2-year <PL2YT=RR 0.5790 0.0130 +134bps -1bps > 5-year <PL5YT=RR 1.0910 0.0290 +183bps +1bps > 10-year <PL10YT=R 1.5330 -0.0030 +205bps -2bps R> FORWARD 3x6 6x9 9x12 3M interban k Czech Rep < 0.26 0.27 0.29 0.87 PRIBOR=> Hungary < 1.13 1.08 1.05 1.08 BUBOR=> Poland < 0.29 0.33 0.36 0.68 WIBOR=> Note: FRA are for ask prices quotes *************************************************** *********** (Additional reporting by Alan Charlish in Warsaw, editing by Larry King)

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