March 2, 2020 / 10:18 AM / in a month

CEE MARKETS-Markets rebound on global rate cut hopes

    By Alan Charlish
    WARSAW, March 2 (Reuters) - Central European assets
rebounded on Monday as hopes for a coordinated response by
central banks to deal with the impact of the coronavirus boosted
risk appetite across emerging markets.
    Global markets had a torrid time last week as fears of a
pandemic wiped more than $5 trillion from a major global equity
index, but investors are now pricing in a monetary response.
    "There is talk of a coordinated rate cut by the Fed and the
Bank of Japan ... so it's risk-on in emerging markets," said a
Warsaw-based currency trader. "We have a relief rally."
    Futures now imply a full 50 basis point cut by the Fed in
March, while on Monday investors were encouraged by comments
from Bank of Japan Governor Haruhiko Kuroda who said the central
bank would take steps to stabilise markets.
    At 0919 GMT the Polish zloty was 0.25% stronger
against the euro at 4.3190. The Czech crown firmed
0.07% to 25.415 and the Hungarian forint was up 0.24%
at 336.53.
    The Romanian leu was little changed at 4.8155.
    The central bank of Hungary will hold its weekly FX swap
tender providing forint liquidity for commercial banks later on
Monday. Results will be published after 1400 GMT.
    The FX swaps, which allow the central bank to manage forint
liquidity in the banking system, have for years been an
important policy tool.
    Stocks also recovered some of the previous week's losses,
with Warsaw's blue-chip WIG 20 index gaining 2.47%.
    Yields on benchmark 10-year Polish bonds
stabilised after falling sharply last week. At 0919 GMT they
were down about 3 basis points on the day at 1.761%, after
touching an intra-day low of 1.662% on Friday.
    The opening of markets in Prague and Budapest was delayed
due to technical reasons.
    Manufacturing activity in Poland in the Czech Republic
continued to contract in February, PMI data showed on Monday,
but the index nevertheless ticked higher in both countries.

    Hungary's seasonally adjusted Purchasing Managers' Index
fell to 50.1 in February from 52.2 in January, the index
publisher said on Monday, as production volumes and new orders
slipped.
    
  
           CEE       SNAPSHO   AT                      
           MARKETS   T        1019              
                              CET               
                     CURRENC                           
                     IES                        
                     Latest   Previou  Daily    Change
                              s                 
                     bid      close    change   in 2020
 Czech     <EURCZK=  25.4150  25.4340   +0.07%   +0.07%
 crown     >                                    
 Hungary   <EURHUF=  336.530  337.340   +0.24%   -1.60%
 forint    >               0        0           
 Polish    <EURPLN=   4.3190   4.3300   +0.25%   -1.45%
 zloty     >                                    
 Romanian  <EURRON=   4.8155   4.8135   -0.04%   -0.56%
 leu       >                                    
 Croatian  <EURHRK=   7.4790   7.4715   -0.10%   -0.45%
 kuna      >                                    
 Serbian   <EURRSD=  117.450  117.545   +0.08%   +0.10%
 dinar     >               0        0           
 Note:     calculated from             1800            
 daily                                 CET      
 change                                         
                                                       
                     Latest   Previou  Daily    Change
                              s                 
                              close    change   in 2020
 Prague               977.11  977.110   +0.00%  -12.42%
                                    0           
 Budapest            40229.6  40229.6   +0.00%  -12.70%
                           4        4           
 Warsaw              1812.53  1768.91   +2.47%  -15.70%
 Buchares            9562.34  9121.27   +4.84%   -4.16%
 t                                              
 Ljubljan  <.SBITOP   907.00   906.08   +0.10%   -2.04%
 a         >                                    
 Zagreb              1863.40  1863.40   +0.00%   -7.63%
 Belgrade  <.BELEX1   791.23   799.08   -0.98%   -1.30%
           5>                                   
 Sofia                550.55   550.25   +0.05%   -3.10%
                                                       
                     Yield    Yield    Spread   Daily
                     (bid)    change   vs Bund  change
                                                in
 Czech                                          spread
 Republic                                       
   2-year  <CZ2YT=R   1.7400   0.0660   +255bp   +10bps
           R>                                s  
   5-year  <CZ5YT=R   1.4320   0.0660   +223bp    +9bps
           R>                                s  
           <CZ10YT=   1.3130  -0.1010   +194bp    -9bps
 10-year   RR>                               s  
 Poland                                                
   2-year  <PL2YT=R   1.4320  -0.0060   +224bp    +3bps
           R>                                s  
   5-year  <PL5YT=R   1.5270  -0.0340   +232bp    -1bps
           R>                                s  
           <PL10YT=   1.7610  -0.0310   +239bp    -2bps
 10-year   RR>                               s  
           FORWARD                                     
                     3x6      6x9      9x12     3M
                                                interba
                                                nk
 Czech                  2.21     2.04     1.81     2.38
 Rep       <PRIBOR=                             
           >                                    
 Hungary                0.73     0.77     0.83     0.61
                                                
 Poland                 1.54     1.38     1.28     1.71
                                                
 Note:     are for ask                                 
 FRA       prices                               
 quotes                                         
 *********************************************         
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 (Reporting by Alan Charlish in Warsaw, Anita Komuves in
Budapest and Jason Hovet and Robert Muller in Prague;
Editing by Andrew Cawthorne)
  
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