February 28, 2020 / 9:49 AM / a month ago

CEE MARKETS-Stocks, currencies plummet as coronavirus fears rise

    By Alan Charlish
    WARSAW, Feb 28 (Reuters) - Central European currencies and
stocks plunged on Friday, as investors around the world
offloaded risky assets as fears grew that the coronavirus
pandemic would cause a global recession.
    World stock markets were on track for their worst week since
the 2008 financial crisis as the global spread of the virus led
to big sell-offs. New infections reported around the world now
surpass those in China.
    At 0905 GMT Warsaw's WIG 20 was down 3.81%,
Budapest's main index was down 5.22% and Prague's PX
index was down 4.93%.
    Currencies also posted sharp losses. The Polish zloty
 was down 0.33% against the euro at 4.3347, while the
Czech crown fell 0.60% to 25.46.
    "The situation on financial markets is more and more like
panic," Bank Millennium analysts said in a note.
    "It is currently difficult to find information that could
reverse current adverse moods, hence we assume a continuation of
the sell-off of the zloty to the euro."
    The Hungarian forint hit a new record low after a
large Hungarian bank heavily sold the currency in the morning,
two dealers in Budapest said.
    It touched 340.60 against the euro before recovering to
trade at 339.92 at 0905 GMT, down 0.22% on the day.
    Central Europe's worst-performing currency had staged a
recovery earlier this month after the National Bank of Hungary
(NBH) said it would use all available tools if needed to fight
high inflation, but coronavirus fears have pushed it back
towards record-low territory.
    Hungary's economic growth slowed to an annual
4.5% in the fourth quarter from 5.0% in the third quarter, its
slowest in almost two years, final unadjusted data confirmed on
Friday.
    Meanwhile, Poland's statistics office said on Friday that
the country's gross domestic product (GDP)
 reached 3.2% y/y in the fourth quarter, above its
first estimate of 3.1%.
    Government bond yields continued to fall with Polish
benchmark 10-year yields down almost 8 basis points
at 1.695% and Czech 10-year yields down 10 basis points at
1.313%.
    "On the one hand,the price and yield dynamics are not
surprising – Polish fixed income follows core markets closely
most of the time and core markets keep printing new yield
all-time lows," Santander Bank Polska analysts wrote in a note.
    "On the other hand markets are pricing in quite a lot of a
recessionary scenario already."
    
    
           CEE       SNAPSHO   AT                      
           MARKETS   T        1005              
                              CET               
                     CURRENC                           
                     IES                        
                     Latest   Previou  Daily    Change
                              s                 
                     bid      close    change   in 2020
 Czech     <EURCZK=  25.4600  25.3060   -0.60%   -0.11%
 crown     >                                    
 Hungary   <EURHUF=  339.920  339.165   -0.22%   -2.58%
 forint    >               0        0           
 Polish    <EURPLN=   4.3347   4.3204   -0.33%   -1.81%
 zloty     >                                    
 Romanian  <EURRON=   4.8120   4.8093   -0.06%   -0.49%
 leu       >                                    
 Croatian  <EURHRK=   7.4650   7.4610   -0.05%   -0.26%
 kuna      >                                    
 Serbian   <EURRSD=  117.510  117.500   -0.01%   +0.05%
 dinar     >               0        0           
 Note:     calculated from             1800            
 daily                                 CET      
 change                                         
                                                       
                     Latest   Previou  Daily    Change
                              s                 
                              close    change   in 2020
 Prague               981.34  1032.25   -4.93%  -12.04%
                                   00           
 Budapest            41249.1  43521.9   -5.22%  -10.49%
                           3        1           
 Warsaw              1780.08  1850.61   -3.81%  -17.21%
 Buchares            9340.69  9562.63   -2.32%   -6.38%
 t                                              
 Ljubljan  <.SBITOP   903.77   929.42   -2.76%   -2.39%
 a         >                                    
 Zagreb              1854.28  1900.43   -2.43%   -8.09%
 Belgrade  <.BELEX1   802.03   802.13   -0.01%   +0.04%
           5>                                   
 Sofia                541.85   548.71   -1.25%   -4.63%
                                                       
                     Yield    Yield    Spread   Daily
                     (bid)    change   vs Bund  change
                                                in
 Czech                                          spread
 Republic                                       
   2-year  <CZ2YT=R   1.7440   0.0780   +252bp   +11bps
           R>                                s  
   5-year  <CZ5YT=R   1.4720  -0.1350   +224bp   -10bps
           R>                                s  
           <CZ10YT=   1.3130  -0.1010   +192bp    -5bps
 10-year   RR>                               s  
 Poland                                                
   2-year  <PL2YT=R   1.4380  -0.0290   +221bp    +0bps
           R>                                s  
   5-year  <PL5YT=R   1.4740  -0.0890   +224bp    -5bps
           R>                                s  
           <PL10YT=   1.6950  -0.0780   +230bp    -3bps
 10-year   RR>                               s  
           FORWARD                                     
                     3x6      6x9      9x12     3M
                                                interba
                                                nk
 Czech                  2.36     2.28     2.01     2.39
 Rep       <PRIBOR=                             
           >                                    
 Hungary                0.76     0.85     0.94     0.60
                                                
 Poland                 1.63     1.55     1.46     1.71
                                                
 Note:     are for ask                                 
 FRA       prices                               
 quotes                                         
 *********************************************         
 *****************                              
 
    
    

 (Reporting by Alan Charlish in warsaw and Krisztina Than in
Budapest; Editing by Kirsten Donovan Editing by Kirsten Donovan)
  
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