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Bonds News

CEE MARKETS-Currencies firm but risks in focus over recovery woes, higher Czech virus cases

    BUDAPEST, Oct 9 (Reuters) - Central European currencies
firmed on Friday, with the Hungarian forint extending gains
after a lower-than-expected September inflation reading took
pressure off the central bank and the trade balance posted a
sizeable surplus in August.
    While the decline in inflation temporarily relieves the
National Bank of Hungary, which is battling inflation and
deepening recession worries, risks in Central European and
emerging markets are high as COVID-19 cases spike. 
    "The slowing pace of recovery in CEE and the rising number
of new COVID-19 cases will likely keep risks elevated," Morgan
Stanley analysts said in a note. 
    "While we think that the benign September inflation print
will ease some of the pressure for the (Hungarian) central bank
to deliver tighter monetary conditions, we think that it is too
early for it to consider realigning the one-week depo rate to
the base rate at 0.60%."
    The bank hiked the one-week depo rate by 15 basis points to
0.75% on Sept. 25, which helped shore up the weakening forint
and reverse a negative trend.
    On Friday, the forint was up 0.1% at 357.20 to the
euro, after it outperformed peers on Thursday.
    Hungary posted a foreign trade surplus of 251 million euros
($295.98 million) in August, above analyst forecasts for 140
million.
    The Czech crown was also 0.1% firmer, even though
the Czech Republic's daily cases of the novel coronavirus rose
to 5,394 on Thursday, the third record tally in a row.
    "Thursday was a bad day for the CZK rates, (on) the long end
dropping by 6 bps on disappointing retail sales, a record number
of new COVID-19 cases and tighter government restrictions
announced in the afternoon," Komercni Banka trader Marek Lesko
said in a morning note on Friday.
     The Czech government will tighten anti-coronavirus measures
from next week, with new curbs on sports and cultural venues and
restaurants as the country struggles with a surge of new cases,
Health Minister Roman Prymula said on Thursday. nL8N2GZ4SK
    Stocks were mixed, with Bucharest's blue chip index
firming 0.3% while Warsaw's and Budapest's
weakened 1.5% and 0.7%, respectively.
            CEE        SNAPSHOT    AT                         
            MARKETS               0955 CET            
                       CURRENCIE                              
                       S                              
                       Latest     Previous  Daily     Change
                       bid        close     change    in 2020
 Czech                   27.1600   27.1800    +0.07%    -6.36%
 crown                                                
 Hungary                357.2000  357.5000    +0.08%    -7.29%
 forint                                               
 Polish                   4.4800    4.4900    +0.22%    -4.99%
 zloty                                                
 Romanian                 4.8725    4.8735    +0.02%    -1.73%
 leu                                                  
 Croatian                 7.5670    7.5670    +0.00%    -1.61%
 kuna                                                 
 Serbian                117.4600  117.5600    +0.09%    +0.09%
 dinar                                                
 Note:      calculated from                 1800 CET          
 daily                                                
 change Latest     Previous  Daily     Change
                                  close     change    in 2020
 Prague                   875.41  874.6800    +0.08%   -21.53%
 Budapest               33460.14  33697.94    -0.71%   -27.39%
 Warsaw                  1694.25   1719.91    -1.49%   -21.20%
 Bucharest               8906.97   8875.47    +0.35%   -10.73%
 Ljubljana                835.43    836.55    -0.13%    -9.77%
 Zagreb                  1614.80   1615.94    -0.07%   -19.96%
 Belgrade   <.BELEX15     692.04    691.75    +0.04%   -13.68%
            >                                         
 Sofia                    421.98    421.65    +0.08%   -25.73%
                                                              
                       Yield      Yield     Spread    Daily
                       (bid)      change    vs Bund   change
                                                      in
 Czech                                                spread
 Republic                                             
   2-year   <CZ2YT=RR     0.0660   -0.0160   +077bps     -2bps
            >                                         
   5-year   <CZ5YT=RR     0.5780   -0.0130   +131bps     -1bps
            >                                         
   10-year  <CZ10YT=R     0.9310   -0.0380   +146bps     -3bps
            R>                                        
 Poland                                                       
   2-year   <PL2YT=RR     0.0240   -0.0100   +073bps     -1bps
            >                                         
   5-year   <PL5YT=RR     0.5580   -0.0060   +129bps     +0bps
            >                                         
   10-year  <PL10YT=R     1.3090   -0.0180   +184bps     -1bps
            R>                                        
            FORWARD                                           
                       3x6        6x9       9x12      3M
                                                      interban
                                                      k
 Czech Rep          <       0.29      0.29      0.34      0.35
            PRIBOR=>                                  
 Hungary            <       0.89      0.91      0.95      0.76
            BUBOR=>                                   
 Poland             <       0.19      0.19      0.19      0.22
            WIBOR=>                                   
 Note: FRA  are for ask prices                                
 quotes                                               
 ***************************************************          
 ***********                                          
    


($1 = 0.8480 euros)

 (Reporting by Krisztina Than; editing by Uttaresh.V)
  
 
 
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