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Jason Hovet

Czechs shift to switch auctions as borrowing surges

23 Nov 2020

PRAGUE, Nov 23 The Czech Finance Ministry has ramped up switch auctions since October to buy debt expiring in 2021 in exchange for longer-dated bonds, in an effort to extend its average maturity and ease the burden of another year of huge borrowing.

UPDATE 2-Czech lawmakers back biggest-ever $5.9 bln tax cut, boosting debt

20 Nov 2020

* Prime Minister Andrej Babis overrides junior coalition party

CEE MARKETS-Central Europe's stocks off peaks, forint settles amid EU budget row

19 Nov 2020

By Jason Hovet PRAGUE, Nov 19 Central Europe's stock markets retreated from multi-week highs on Thursday and the Polish zloty and Czech crown also fell from peaks, with the boost from vaccine hopes fading as rising COVID-19 infections cut into risk appetite. The region's currencies were easing into a holding pattern, dealers said. Hungary's forint was a touch weaker after being hit by political risks this week, down a quarter of a percent on the day at 361.45 to the euro at 1040 GMT. Budapest, along with Poland's government in Warsaw, blocked the European Union's 2021-2027 budget and the recovery plan, worth a combined 1.85 trillion euros ($2.19 trillion), because access to the funds would be conditional upon respecting the rule of law. Both countries' prime ministers on Wednesday accused EU countries of blackmail and Hungarian Prime Minister Viktor Orban reiterated on Thursday his country could not accept the package in its current form. "We are standing around waiting, between 360.50 and 361.50," a dealer said, adding markets were waiting on the EU's next move in the budget row. Markets were sharply tuned to a rising number of COVID-19 infections around Europe and the United States after getting some hope recently from vaccine developments. Hungary's government said on Thursday it would be ready to pass tougher restrictions if the pace of infections does not slow. In the Czech Republic, one of the worst hit in Europe by the second wave of the pandemic, daily cases have started declining from peaks seen in recent weeks. A dealer said the crown was being pulled between the stabilising health situation, aiding the currency, and worries over EU budget disputes. The crown traded down 0.1% at 26.39 to the euro, off an 11-week high hit this week. Poland's zloty weakened 0.25% to 4.4775 per euro after testing a one-month high early in the session. On stock markets, Warsaw's WIG20 index led losses, falling 1.3% from its highest level since the end of August which it hit on Wednesday. Prague and Budapest fell 0.5-0.7%. CEE SNAPSHO AT MARKETS T 1140 CET CURRENC IES Latest Previou Daily Change s bid close change in 2020 EURCZK Czech <EURCZK 26.3900 26.3680 -0.08% -3.63% = crown => EURHUF Hungary <EURHUF 361.450 360.585 -0.24% -8.38% = forint => 0 0 EURPLN Polish <EURPLN 4.4775 4.4665 -0.25% -4.94% = zloty => EURRON Romanian <EURRON 4.8725 4.8735 +0.02% -1.73% = leu => EURHRK Croatian <EURHRK 7.5640 7.5655 +0.02% -1.57% = kuna => EURRSD Serbian <EURRSD 117.450 117.550 +0.09% +0.10% = dinar => 0 0 Note: calcula 1800 daily ted CET change from STOCKS Latest Previou Daily Change s close change in 2020 .PX Prague 940.13 945.270 -0.54% -15.73% 0 .BUX Budapest 38106.9 38361.8 -0.66% -17.31% 5 2 .WIG20 Warsaw <.WIG20 1787.64 1810.43 -1.26% -16.86% > .BETI Buchares 8978.27 8936.25 +0.47% -10.01% t .SBITO Ljubljan <.SBITO 852.95 843.02 +1.18% -7.87% P a P> .CRBEX Zagreb <.CRBEX 1689.93 1695.34 -0.32% -16.23% > .BELEX Belgrade <.BELEX 713.77 713.76 +0.00% -10.97% 15 15> .SOFIX Sofia <.SOFIX 424.28 425.66 -0.32% -25.32% > BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT= 2-year <CZ2YT= 0.0220 -0.0150 +076bp +0bps RR RR> s CZ5YT= 5-year <CZ5YT= 0.6950 -0.0210 +144bp -1bps RR RR> s CZ10YT <CZ10YT 1.1620 -0.0200 +173bp -1bps =RR 10-year =RR> s Poland PL2YT= 2-year <PL2YT= 0.0000 -0.0180 +073bp -1bps RR RR> s PL5YT= 5-year <PL5YT= 0.3800 -0.0630 +113bp -6bps RR RR> s PL10YT <PL10YT 1.1610 -0.0140 +173bp +0bps =RR 10-year =RR> s FRA 3x6 6x9 9x12 3M interba nk Czech <CZKFRA 0.35 0.38 0.43 0.35 Rep ><PRIBO R=> Hungary <HUFFRA 0.73 0.73 0.71 0.77 ><BUBOR => Poland <PLNFRA 0.20 0.20 0.23 0.22 ><WIBOR => Note: FRA quotes are for ask prices *********************************** *************************** ($1 = 0.8457 euros) (Reporting by Jason Hovet in Prague and Anita Komuves in Budapest; editing by Uttaresh.V)

UPDATE 1-CEE MARKETS-FX, stocks hit multi-week highs, Czech central bank holds fire

05 Nov 2020

By Jason Hovet PRAGUE, Nov 5 Central European currencies extended gains on Thursday and stocks hit multi-week highs as markets saw Democratic challenger Joe Biden inching nearer victory in a tightly contested U.S. presidential election. The Czech crown gained 0.6% on the day and hit a more than seven-week high, also helped by the central bank holding interest rates as expected and indicating no changes were likely in the coming months either. The forint led Central European currency gains, rising 1.0% to 359.29 to the euro, its strongest in more than three-weeks. The Hungarian central bank kept the interest rate on its one-week deposit facility unchanged, as expected after recent currency gains. "The forint was very weak and investors are closing their positions," an FX trader said. He said it could stay around current levels for a while if the risk-on mood in the region continued. The Polish zloty inched up to 4.535 to the euro, also touching a three-week high. The crown was up at 26.695, gaining momentum after the central bank held fire on rates, even though some have priced in a slight chance of future cuts. The Czech National Bank has held its key rate at 0.25% since May after cutting by 200 basis points in the spring when the pandemic first hit, with inflation staying stubbornly high. "For the rest of this year, we expect interest rates to remain stable," Erste Group Bank said. "However, in the case of a significant economic deterioration, due to the further worsening of the COVID-19 pandemic, the CNB may further ease monetary conditions." Stock markets also climbed as Budapest hit a two-month high, rising 1.4%. Warsaw rose 1.8% and Prague added 0.9%- both indices near their highest since mid-October. CEE SNAPSHO AT MARKETS T 1810 CET CURRENC IES Latest Previou Daily Change s bid close change in 2020 EURCZK Czech <EURCZK 26.6950 26.8640 +0.63% -4.73% = crown => EURHUF Hungary <EURHUF 359.290 363.020 +1.04% -7.83% = forint => 0 0 EURPLN Polish <EURPLN 4.5350 4.5388 +0.08% -6.14% = zloty => EURRON Romanian <EURRON 4.8650 4.8662 +0.02% -1.58% = leu => EURHRK Croatian <EURHRK 7.5540 7.5545 +0.01% -1.44% = kuna => EURRSD Serbian <EURRSD 117.470 117.570 +0.09% +0.09% = dinar => 0 0 Note: calcula 1800 daily ted CET change from STOCKS Latest Previou Daily Change s close change in 2020 .PX Prague 872.48 865.010 +0.86% -21.79% 0 .BUX Budapest 35264.9 34774.7 +1.41% -23.47% 8 2 .WIG20 Warsaw <.WIG20 1670.43 1640.94 +1.80% -22.31% > .BETI Buchares 8845.30 8774.67 +0.80% -11.35% t .SBITO Ljubljan <.SBITO 827.08 820.39 +0.82% -10.67% P a P> .CRBEX Zagreb <.CRBEX 1591.28 1581.38 +0.63% -21.12% > .BELEX Belgrade <.BELEX 697.35 698.16 -0.12% -13.02% 15 15> .SOFIX Sofia <.SOFIX 425.91 427.69 -0.42% -25.03% > BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT= 2-year <CZ2YT= 0.0030 -0.0300 +079bp -3bps RR RR> s CZ5YT= 5-year <CZ5YT= 0.5630 -0.0150 +137bp -1bps RR RR> s CZ10YT <CZ10YT 0.9940 -0.0380 +163bp -4bps =RR 10-year =RR> s Poland PL2YT= 2-year <PL2YT= 0.0010 -0.0050 +078bp +0bps RR RR> s PL5YT= 5-year <PL5YT= 0.3280 0.0070 +114bp +1bps RR RR> s PL10YT <PL10YT 1.1580 0.0080 +179bp +1bps =RR 10-year =RR> s FRA 3x6 6x9 9x12 3M interba nk Czech <CZKFRA 0.27 0.23 0.31 0.35 Rep ><PRIBO R=> Hungary <HUFFRA 0.77 0.77 0.78 0.77 ><BUBOR => Poland <PLNFRA 0.14 0.12 0.12 0.22 ><WIBOR => Note: FRA quotes are for ask prices *********************************** *************************** (Reporting by Jason Hovet in Prague and Anita Komuves in Budapest; Editing by Angus MacSwan, Kirsten Donovan)

CEE MARKETS-FX, stocks keep up gains, crown stronger before central bank meets

05 Nov 2020

By Jason Hovet PRAGUE, Nov 5 Central European currencies kept up gains on Thursday and stocks hit multi-week highs as markets saw Democratic challenger Joe Biden nearing victory in a tightly contested U.S. presidential election. The Czech crown gained 0.2% on the day and was off a more than six-week high hit in the previous session, with investors keeping an eye on a central bank policy meeting on Thursday where analysts widely expected rates to stay on hold. In Hungary, the forint led Central European currency gains, rising 0.7% to 360.58 to the euro to a more than three-week high before the central bank holds a weekly tender of its one-week deposit facility. "The appreciation of the HUF makes it unlikely to see a hike at today’s 1-week depo tender," Erste Group Bank analysts said. Currencies were helped by a drop in the U.S. dollar and yields amid election positioning although trade remained rocky throughout markets. The Polish zloty inched up to 4.537 to the euro, also touching a three-week high. The crown was up at 26.82 to the euro. The Czech National Bank is expected to keep interest rates unchanged at its Thursday and also through 2021, a Reuters poll showed on Tuesday. Markets will be looking at the bank's updated economic outlook as the second wave of coronavirus pandemic hits the country hard and shuts parts of the economy. "The CNB might signal that it remains prepared to implement expansionary measures if the situation was to deteriorate massively again," Commerzbank said. "Unchanged key rates are unlikely to provide much momentum for the crown, the decision is likely to be largely priced in." Stock markets also climbed as markets remain focused on the U.S. election result. Budapest hit its highest since mid-September before giving up some early gains to sit flat on the day. Warsaw rose 0.7% and Prague retreated from early gains - although both indices were near their highest since mid-October. CEE SNAPSHO AT MARKETS T 1011 CET CURRENC IES Latest Previou Daily Change s bid close change in 2020 EURCZK Czech <EURCZK 26.8200 26.8640 +0.16% -5.18% = crown => EURHUF Hungary <EURHUF 360.580 363.020 +0.68% -8.16% = forint => 0 0 EURPLN Polish <EURPLN 4.5370 4.5388 +0.04% -6.18% = zloty => EURRON Romanian <EURRON 4.8650 4.8662 +0.02% -1.58% = leu => EURHRK Croatian <EURHRK 7.5500 7.5545 +0.06% -1.39% = kuna => EURRSD Serbian <EURRSD 117.470 117.570 +0.09% +0.09% = dinar => 0 0 Note: calcula 1800 daily ted CET change from STOCKS Latest Previou Daily Change s close change in 2020 .PX Prague 864.03 865.010 -0.11% -22.55% 0 .BUX Budapest 34781.6 34774.7 +0.02% -24.52% 5 2 .WIG20 Warsaw <.WIG20 1652.67 1640.94 +0.71% -23.13% > .BETI Buchares 8821.45 8774.67 +0.53% -11.58% t .SBITO Ljubljan <.SBITO 825.45 820.39 +0.62% -10.85% P a P> .CRBEX Zagreb <.CRBEX 1589.50 1581.38 +0.51% -21.21% > .BELEX Belgrade <.BELEX 698.16 698.16 +0.00% -12.91% 15 15> .SOFIX Sofia <.SOFIX 427.84 427.69 +0.04% -24.69% > BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT= 2-year <CZ2YT= 0.0230 -0.0100 +082bp +0bps RR RR> s CZ5YT= 5-year <CZ5YT= 0.5530 -0.0250 +138bp -1bps RR RR> s CZ10YT <CZ10YT 1.0110 -0.0210 +167bp +0bps =RR 10-year =RR> s Poland PL2YT= 2-year <PL2YT= -0.0350 -0.0410 +076bp -4bps RR RR> s PL5YT= 5-year <PL5YT= 0.2960 -0.0250 +112bp -1bps RR RR> s PL10YT <PL10YT 1.1300 -0.0200 +179bp +0bps =RR 10-year =RR> s FRA 3x6 6x9 9x12 3M interba nk Czech <CZKFRA 0.27 0.23 0.24 0.35 Rep ><PRIBO R=> Hungary <HUFFRA 0.85 0.86 0.88 0.77 ><BUBOR => Poland <PLNFRA 0.14 0.12 0.10 0.22 ><WIBOR => Note: FRA quotes are for ask prices *********************************** *************************** (Reporting by Jason Hovet in Prague; Editing by Angus MacSwan)

Czechs seek more patient capacity as COVID-19 infections soar

15 Oct 2020

PRAGUE The Czech Republic will start building capacity for COVID-19 patients outside of hospitals, officials said on Thursday, as the country faces the fastest rate of infections in Europe.

CEE MARKETS-Crown weakens amid tightening COVID-19 measures, region mixed

12 Oct 2020

By Anita Komuves and Jason Hovet BUDAPEST/PRAGUE, Oct 12 The crown fell on Monday with markets in anticipation of new steps the Czech government may take to tackle a surge in COVID-19 infections, while most other central European assets were mixed. The Czech currency has struggled to regain ground with infections rising at Europe's fastest per-capita rate. Markets have started pricing in chances a rate cut to a "technical zero" while bond yields have risen in recent weeks with markets digesting government plans for a larger-than-expected budget deficit plan for 2021 that will boost borrowing. The spread of a Czech 10-year bond yields over German bonds is at a one-month high. The crown slid 0.31% to 27.110 per euro. Government officials said on Sunday they would seek to avoid the kind of blanket lockdown imposed in the spring, which hammered the economy. Czech National Bank Governor Jiri Rusnok reiterated in an interview with Forbes, published on Monday, the bank did not have to resort to any unorthodox tools. Czech inflation slowed more than expected last month, data showed on Monday, but it remains above 3%, the upper limit of the central bank's tolerance band around a 2% target. "With the worsening situation (around COVID-19), people expect more a cut than for rates to rise, even with inflation still above target," a trader said. The Romanian leu was little moved at 4.8720 against the euro after data showed on Monday Romania's consumer price inflation slowed more than expected in September. Analysts expect policymakers to hold the benchmark interest rate unchanged at 1.50%. "We believe ... that the next step towards more easing will be made via lowering the reserve requirement levels," ING Bank Romania said in a note. Elsewhere, the Polish zloty eased 0.30% and was trading at 4.4654 per euro. The Hungarian forint was steady at 356.41 per euro after gains at the end of last week. The currency outperformed its peers following Thursday's better-than-expected inflation data. Most stocks weakened with Hungary's index sliding 0.81% and Prague's equities down 0.43%. Bucharest bucked the trend and gained 0.64%. Poland's stock market slid 0.14% while shares in Polish e-commerce company Allegro rose 51.2% on their stock market debut. CEE SNAPSHO AT MARKETS T 1050 CET CURRENC IES Latest Previous Daily Change bid close change in 2020 EURCZK= Czech <EURCZK= 27.1100 27.0200 -0.33% -6.19% crown > EURHUF= Hungary <EURHUF= 356.410 356.4500 +0.01 -7.09% forint > 0 % EURPLN= Polish <EURPLN= 4.4790 4.4654 -0.30% -4.97% zloty > EURRON= Romanian <EURRON= 4.8720 4.8710 -0.02% -1.72% leu > EURHRK= Croatian <EURHRK= 7.5690 7.5690 +0.00 -1.63% kuna > % EURRSD= Serbian <EURRSD= 117.470 117.5600 +0.08 +0.09% dinar > 0 % Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2020 .PX Prague 868.72 872.5000 -0.43% -22.13% .BUX Budapest 33387.5 33660.44 -0.81% -27.55% 5 .WIG20 Warsaw 1696.47 1698.91 -0.14% -21.10% .BETI Buchares 8897.98 8841.21 +0.64 -10.82% t % .SBITOP Ljubljan <.SBITOP 838.74 837.32 +0.17 -9.41% a > % .CRBEX Zagreb 1615.20 1615.69 -0.03% -19.94% .BELEX1 Belgrade <.BELEX1 691.29 689.85 +0.21 -13.77% 5 5> % .SOFIX Sofia 426.13 423.27 +0.68 -25.00% % Yield Yield Spread Daily (bid) change vs change Bund in Czech spread Republic CZ2YT=R 2-year <CZ2YT=R 0.0700 -0.0060 +079b +0bps R R> ps CZ5YT=R 5-year <CZ5YT=R 0.5550 -0.0300 +130b -2bps R R> ps CZ10YT= <CZ10YT= 0.9580 -0.0090 +150b +0bps RR 10-year RR> ps Poland PL2YT=R 2-year <PL2YT=R 0.0000 -0.0290 +072b -2bps R R> ps PL5YT=R 5-year <PL5YT=R 0.5400 -0.0090 +128b +0bps R R> ps PL10YT= <PL10YT= 1.3050 -0.0050 +185b +0bps RR 10-year RR> ps FORWARD 3x6 6x9 9x12 3M interba nk Czech 0.29 0.29 0.29 0.35 Rep <PRIBOR= > Hungary 0.88 0.89 0.93 0.76 Poland 0.18 0.17 0.17 0.22 Note: are for ask FRA prices quotes ********************************************* ***************** (Reporting by Anita Komuves in Budapest, Jason Hovet in Prague, Alan Charlish in Warsaw and Luiza Ilie in Bucharest Editing by Tomasz Janowski)

Czech gunmaker CZG's scaled-down IPO secures cash for U.S. plant

02 Oct 2020

PRAGUE Czech gunmaker CZG-Ceska Zbrojovka Group dramatically reduced the size of its initial public offering, a rare new listing in Prague, after weak demand for its shares.

Czech PM Babis taps epidemiologist as minister to fight COVID-19 surge

22 Sep 2020

PRAGUE Czech Prime Minister Andrej Babis tapped a top epidemiologist as health minister on Monday after the previous minister quit amid a spike in COVID-19 infections that has led to the country's total cases doubling within just three weeks.

UPDATE 4-Czech PM Babis taps epidemiologist as minister to fight COVID-19 surge

22 Sep 2020

* Man nominated to replace him helped lead initial response (Adds PM's address, details on cases, crown, GRAPHIC)

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