March 13, 2020 / 3:17 PM / in 22 days

CEE MARKETS-Warsaw stocks jump after worst-ever drop as markets rebound

 (Updates stock gains, Romania politics, details)
    By Jason Hovet
    PRAGUE, March 13 (Reuters) - The hardest-hit central
European stock markets recovered some losses on Friday, with
Warsaw blue-chips on track for their biggest jump since 2009 a
day after posting their worst-ever fall to an 11-year low.
    The WIG20 index was up 6.7% at 1438 GMT, winning
back half its drop on Thursday and cutting losses over the last
three weeks to 34%. Budapest rose 4.9% and Prague
gained 2.7%.
    Currencies also clawed back ground as the Czech crown
 firmed 0.2% to 26.144 to the euro after dropping over
2% on Thursday amid market turmoil caused by economic worries
from the coronavirus outbreak. 
    The fall was its biggest one-day drop since the Czech
central bank launched a currency intervention regime in 2013 as
part of its monetary policy.
    Markets on Friday started slightly rolling back the pricing
in of aggressive Czech rate cuts over the next year although
still firmly see a hike at the next meeting on March 26. 
    Last month the Czech central bank delivered its ninth rate
hike since 2017, and Governor Jiri Rusnok said this week there
was not an acute need for easing yet.
    While until recently markets were expecting a hawkish turn
from the region's central banks as policymakers dealt with
persisting domestic inflationary pressures amid slowing growth,
many see rate cuts coming down the line amid the coronavirus
outbreak. Polish markets price in chances of more than two cuts
in the next year.
    Poland's zloty inched 0.1% lower on Friday.
Hungary's forint gained 0.1% to 338.75 to the euro.
    The Romanian leu was also a touch higher, at 4.822
per euro, amid attempts to get a new government that can fully
tackle the spreading coronavirus outbreak.
    Romania's centrist President Klaus Iohannis on Friday asked
interim Prime Minister Ludovic Orban to form a government and
get a parliamentary vote of confidence as early as Saturday.
    Orban said earlier in the day that he and his entire cabinet
would quarantine themselves after coming into contact with a
senator who was later confirmed to have the coronavirus.

    Analysts and market players are expecting volatility to
continue as investors wait for policymakers to step up their
response to the virus. Global hopes of that boosted the market
on Friday.
    "The (Hungarian central bank) is expected to inject
significant liquidity into the banking system at its next weekly
tender on Monday if needed, which could weaken the forint
slightly," Equilor brokerage said in a morning note.
    While central Europe has fewer confirmed cases of the new
virus than in its western neighbours, the region's governments
have taken some of the swiftest steps to contain the spread,
including curbing or controlling international travel to their
countries, closing most schools and banning large gatherings. 
    The Czech government on Friday imposed a ban on foreigners
entering the country and Czechs travelling abroad as of Monday.

                   CEE      SNAPSHO                           
                   MARKETS  T                          
                            Latest   Previou  Daily    Change
                            bid      close    change   in 2020
 EURCZK  Czech     <EURCZK  26.1440  26.1955   +0.20%   -2.72%
 =       crown     =>                                  
 EURHUF  Hungary   <EURHUF  338.750  339.015   +0.08%   -2.25%
 =       forint    =>             0        0           
 EURPLN  Polish    <EURPLN   4.3700   4.3645   -0.13%   -2.60%
 =       zloty     =>                                  
 EURRON  Romanian  <EURRON   4.8220   4.8250   +0.06%   -0.70%
 =       leu       =>                                  
 EURHRK  Croatian  <EURHRK   7.5650   7.6050   +0.53%   -1.58%
 =       kuna      =>                                  
 EURRSD  Serbian   <EURRSD  117.630  117.665   +0.03%   -0.05%
 =       dinar     =>             0        0           
         Note:     calcula                    1800            
         daily     ted                        CET      
         change    from                                
                            Latest   Previou  Daily    Change
                                     close    change   in 2020
 .PX     Prague              837.45  815.740   +2.66%  -24.93%
 .BUX    Budapest           33888.5  32317.8   +4.86%  -26.46%
                                  8        9           
 .WIG20  Warsaw    <.WIG20  1392.67  1305.73   +6.66%  -35.23%
 .BETI   Buchares           8086.83  7950.02   +1.72%  -18.95%
 .SBITO  Ljubljan  <.SBITO   761.38   753.70   +1.02%  -17.77%
 P       a         P>                                  
 .CRBEX  Zagreb    <.CRBEX  1512.59  1429.47   +5.81%  -25.02%
 .BELEX  Belgrade  <.BELEX   714.24   726.17   -1.64%  -10.91%
 15                15>                                 
 .SOFIX  Sofia     <.SOFIX   448.11   457.61   -2.08%  -21.13%
                            Yield    Yield    Spread   Daily
                            (bid)    change   vs Bund  change
         Czech                                         spread
 CZ2YT=    2-year  <CZ2YT=   1.6670   0.0480   +259bp    +3bps
 RR                RR>                              s  
 CZ5YT=    5-year  <CZ5YT=   1.5100   0.0380   +230bp    -6bps
 RR                RR>                              s  
 CZ10YT            <CZ10YT   1.1040   0.0000   +170bp   -15bps
 =RR     10-year   =RR>                             s  
 PL2YT=    2-year  <PL2YT=   1.4530   0.0850   +238bp    +6bps
 RR                RR>                              s  
 PL5YT=    5-year  <PL5YT=   1.7880   0.0460   +258bp    -5bps
 RR                RR>                              s  
 PL10YT            <PL10YT   1.8330   0.0000   +243bp   -15bps
 =RR     10-year   =RR>                             s  
                            3x6      6x9      9x12     3M
         Czech     <CZKFRA     1.83     1.40     1.22     2.32
         Rep       ><PRIBO                             
         Hungary   <HUFFRA     0.64     0.70     0.80     0.66
         Poland    <PLNFRA     1.40     1.17     1.11     1.69
         Note: FRA quotes                                     
         are for ask                                   
 (Reporting by Jason Hovet in Prague, Krisztina Than in Budapest
and Alan Charlish in Warsaw; editing by Nick Macfie)
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