April 24, 2020 / 9:25 AM / a month ago

CEE MARKETS-Stocks ease as mood sours over economic woes, forint regains some ground

    BUDAPEST, April 24 (Reuters) - Central European stocks eased
on Friday as investor sentiment deteriorated on doubts about
progress in the development of drugs to treat COVID-19 and fears
over the scale of the economic meltdown caused by the pandemic.
    European Union leaders agreed on Thursday to build a
trillion euro emergency fund to help recover from the pandemic
but leaving a decision on divisive details until the summer.
    "We can see the earlier problems resurfacing in EU crisis
management, there is no agreement among member states, the
response is slow and not the most efficient," CIB Bank analysts
said in a morning note.
    This has weighed on mood in the region's stock markets with
Prague and Warsaw leading losses, easing by more
than 1%.
    Currencies were rangebound, with the Hungarian
forint, the region's underperformer this year,
recouping some of its losses, and trading 0.2% higher at 0858
GMT, in line with the Polish zloty.
    "The technical picture has not changed in any meaningful
way," brokerage Equilor said in a note, adding that the forint
could edge towards 360 versus the euro and 335 versus the dollar
in the coming days.
    "It is the rate-setting meeting of the National Bank of
Hungary that could bring about any substantial moves in the
forint," Equilor analysts added.
    The Hungarian central bank has been navigating a tricky path
of preventing a sell-off in the currency by keeping interest
rates up while supporting the shrinking economy with other
tools. 
    A Reuters poll on Thursday showed analysts expect the bank
to leave its key rates unchanged next Tuesday after an
unexpected increase in lending rates early this month.
    Hungary's central bank governor, Gyorgy Matolcsy, told the
Figyelo weekly on Thursday the bank was ready to take more steps
to mitigate the economic impact of the pandemic. It will begin
its bond-buying programme early next month, he said.
    Next Tuesday the NBH will decide about the scale and terms
of its planned asset-purchasing programme, which investors will
eye closely after Hungary's government increased the budget
deficit, and on Thursday it issued eurobonds to help finance the
higher funding need.
            CEE        SNAPSHOT    AT                         
            MARKETS               1052 CET            
                       CURRENCIE                              
                       S                              
                       Latest     Previous  Daily     Change
                       bid        close     change    in 2020
 Czech                   27.3550   27.5040    +0.54%    -7.03%
 crown                                                
 Hungary                356.1900  356.7500    +0.16%    -7.03%
 forint                                               
 Polish                   4.5320    4.5426    +0.23%    -6.08%
 zloty                                                
 Romanian                 4.8450    4.8420    -0.06%    -1.17%
 leu                                                  
 Croatian                 7.5677    7.5750    +0.10%    -1.62%
 kuna                                                 
 Serbian                117.5900  117.6400    +0.04%    -0.02%
 dinar                                                
 Note:      calculated from                 1800 CET          
 daily                                                
 change                                               
                                                              
                       Latest     Previous  Daily     Change
                                  close     change    in 2020
 Prague                   845.59  855.1900    -1.12%   -24.21%
 Budapest               32648.20  32805.50    -0.48%   -29.15%
 Warsaw                  1608.91   1626.10    -1.06%   -25.17%
 Bucharest               7902.45   7921.89    -0.25%   -20.80%
 Ljubljana                778.32    777.37    +0.12%   -15.94%
 Zagreb                  1559.83   1562.12    -0.15%   -22.68%
 Belgrade   <.BELEX15     672.66    679.51    -1.01%   -16.09%
            >                                         
 Sofia                    444.60    442.63    +0.45%   -21.74%
                                                              
                       Yield      Yield     Spread    Daily
                       (bid)      change    vs Bund   change
                                                      in
 Czech                                                spread
 Republic                                             
   2-year   <CZ2YT=RR     0.8230    0.1380   +152bps    +14bps
            >                                         
   5-year   <CZ5YT=RR     1.0130    0.0470   +165bps     +7bps
            >                                         
   10-year  <CZ10YT=R     1.5080    0.1790   +197bps    +21bps
            R>                                        
 Poland                                                       
   2-year   <PL2YT=RR     0.6030   -0.0020   +130bps     +0bps
            >                                         
   5-year   <PL5YT=RR     0.9670   -0.0370   +161bps     -2bps
            >                                         
   10-year  <PL10YT=R     1.3620    0.0150   +182bps     +5bps
            R>                                        
            FORWARD                                           
                       3x6        6x9       9x12      3M
                                                      interban
                                                      k
 Czech Rep          <       0.29      0.31      0.35      0.95
            PRIBOR=>                                  
 Hungary            <       1.21      1.14      1.10      1.10
            BUBOR=>                                   
 Poland             <       0.30      0.29      0.31      0.69
            WIBOR=>                                   
 Note: FRA  are for ask prices                                
 quotes                                               
 ***************************************************          
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 (Reporting by Krisztina Than; Editing by Nick Macfie)
  
 
 
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