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United Kingdom

Anita Komuves

Hungary's PM Orban unveils plans to jump-start the economy

2:22pm BST

BUDAPEST Hungary will raise its budget deficit to 2.7% of economic output this year from a targeted 1% to help fund measures to jump-start the economy, which has been hit badly by the new coronavirus pandemic, Prime Minister Viktor Orban said on Monday.

CEE MARKETS-Hungary's forint pares gains after PM unveils stimulus plan

1:48pm BST

(Recasts with Hungarian economic programme, updates prices) By Anita Komuves BUDAPEST, April 6 The Hungarian forint gave up some of its early gains versus the euro by Monday afternoon after Prime Minister Viktor Orban announced details of a $30 billion economic stimulus package. Orban said Hungary would raise this year's budget deficit to 2.7% of economic output from 1% to help finance a package amounting to between 18% and 20% of gross domestic product (GDP), including the central bank's programmes. The measures will include subsidised loans to Hungarian companies, Orban said. The government was also ready to pay some of the wage costs of companies in case they are forced to cut working hours, among other measures. Some of the forint's early gains melted away after Orban's statement, leaving the currency up 0.65% at 365.50 by 1133 GMT, having been up more than 1% earlier in the session. "Orban's message was somewhat confusing by not making clear the difference between the monetary and the fiscal measures and by not stressing that this is not a 18%-20% loosening of fiscal policy," a Budapest-based trader said, also noting a rise in government bond yields. "Fifteen- to 20-year government bond yields are up by 15 basis points today while all other tenors are up 4 basis points, with very little trade going on," the trader said. The Hungarian government agency responsible for bonds only updates its site on Eikon once a day. The forint plunged last week to record lows near 370 to the euro on a number of factors including a government move to secure open-ended emergency powers to fight the coronavirus. It regained some strength after the central bank on Wednesday announced a new one-week deposit tender available to banks at its 0.9% base rate, which some analysts called an implicit rate hike. Central European currencies and stock indexes firmed on Monday, with Prague's equities leading gains as a slowdown in the growth of the coronavirus over the weekend lifted the mood in major markets around the world. Warsaw's blue chip index strengthened 3.1% and Bucharest gained 2.5%. The Polish zloty was up 0.42% at 4.5600 versus the euro, while the Romanian leu was stable. The Czech crown gained 0.72% and stocks were up 3.35% as the country reported a slower daily percentage rise in confirmed coronavirus cases. Czech bond yields have stabilised, with dealers saying demand is still strong for the country's paper on secondary markets, boosted by risk-on sentiment in markets. The Finance Ministry has sold a large amount of bonds and treasury bills in primary auctions in recent weeks and has also been selling some in the secondary market. The Polish Finance Ministry will offer T-bills worth between 2.0 and 4.0 billion zlotys at tender on Monday. CEE SNAPSHO AT MARKETS T 1333 CET CURRENC IES Latest Previou Daily Change s bid close change in 2020 EURCZK Czech <EURCZK 27.6000 27.8000 +0.72% -7.86% = crown => EURHUF Hungary <EURHUF 365.500 367.800 +0.63% -9.40% = forint => 0 0 EURPLN Polish <EURPLN 4.5600 4.5790 +0.42% -6.66% = zloty => EURRON Romanian <EURRON 4.8310 4.8310 +0.00% -0.88% = leu => EURHRK Croatian <EURHRK 7.6255 7.6305 +0.07% -2.36% = kuna => EURRSD Serbian <EURRSD 117.440 117.520 +0.07% +0.11% = dinar => 0 0 Note: calculated from 1800 daily CET change Latest Previou Daily Change s close change in 2020 .PX Prague 800.29 774.340 +3.35% -28.27% 0 .BUX Budapest 32797.2 32265.9 +1.65% -28.83% 4 2 .WIG20 Warsaw <.WIG20 1553.37 1506.48 +3.11% -27.75% > .BETI Buchares 7710.96 7525.60 +2.46% -22.71% t .SBITO Ljubljan <.SBITO 736.71 716.62 +2.80% -20.43% P a P> .CRBEX Zagreb <.CRBEX 1582.99 1504.98 +5.18% -21.53% > .BELEX Belgrade <.BELEX 664.25 645.32 +2.93% -17.14% 15 15> .SOFIX Sofia <.SOFIX 427.28 423.34 +0.93% -24.79% > Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT= 2-year <CZ2YT= 1.0120 0.0480 +166bp +4bps RR RR> s CZ5YT= 5-year <CZ5YT= 1.2030 0.0060 +181bp +0bps RR RR> s CZ10YT <CZ10YT 1.4970 0.0820 +192bp +7bps =RR 10-year =RR> s Poland PL2YT= 2-year <PL2YT= 0.9850 -0.0940 +163bp -10bps RR RR> s PL5YT= 5-year <PL5YT= 1.3440 0.0520 +195bp +4bps RR RR> s PL10YT <PL10YT 1.6750 -0.0070 +210bp -2bps =RR 10-year =RR> s FORWARD 3x6 6x9 9x12 3M interba nk Czech <CZKFRA 0.35 0.37 0.47 1.01 Rep ><PRIBO R=> Hungary <HUFFRA 1.12 1.05 1.14 0.93 ><BUBOR => Poland <PLNFRA 0.59 0.41 0.41 1.17 ><WIBOR => Note: are for ask FRA prices quotes (Additional reporting by Jason Hovet in Prague and Alan Charlish in Warsaw Editing by David Holmes )

CEE MARKETS-Hungary's forint leads gains as markets await stimulus measures

10:41am BST

By Anita Komuves BUDAPEST, April 6 Central European stock indexes and currencies firmed on Monday, with the Hungarian forint leading gains, as a slowdown in the growth of the coronavirus over the weekend lifted the mood in major markets around the world. The forint gained more than 1% and was trading at 363.65 versus the euro, while Budapest's stock index was up 1.8%, as Prime Minister Viktor Orban was set to announce details of a $30 billion economic stimulus package. "Investors seem to be waiting for a miracle, and that strengthens the forint," an FX trader in Budapest said. "However, we do not yet know if these measures will have the desired long-term effect and help the economy." A few details of the measures, amounting to between 18% and 22% of Hungary's GDP, were announced by Orban's chief of staff on Saturday. Gergely Gulyas said the government had created a $2 billion special fund to aid the fight against the novel coronavirus, which will include contributions from banks and foreign retailers. Domestic banks will be expected to pay 55 billion forints ($163 million) into the fund this year, with multinational retailers adding 36 billion. The forint plunged last week to record lows near 370 to the euro on a number of factors including a government move to secure open-ended emergency powers to fight the coronavirus. It regained some strength after the central bank on Wednesday announced a new one-week deposit tender available to banks at its 0.9% base rate, which some analysts called an implicit rate hike. Elsewhere, the Polish zloty was up 0.35% at 4.563 versus the euro, while the Romanian leu was stable. Stock indexes were up across the region. Warsaw outperformed with a near 3% advance. The Czech crown gained 0.51% and equities were up 1.7% as the country reported a slower daily percentage rise in confirmed coronavirus cases. Czech bond yields have stabilised, with dealers saying demand is still strong for the country's paper on secondary markets, boosted by risk-on sentiment in markets. The Finance Ministry has sold a large amount of bonds and treasury bills in primary auctions in the past few weeks and has also been selling some in the secondary market. The Polish Finance Ministry will offer T-bills worth between 2.0 and 4.0 billion zlotys at tender on Monday. CEE SNAPSHOT AT MARKETS 1010 CET CURRENCIE S Latest Previous Daily Change bid close change in 2020 Czech 27.6600 27.8000 +0.51% -8.05% crown Hungary 363.6500 367.8000 +1.14% -8.94% forint Polish 4.5630 4.5790 +0.35% -6.72% zloty Romanian 4.8295 4.8310 +0.03% -0.85% leu Croatian 7.6266 7.6305 +0.05% -2.38% kuna Serbian 117.5200 117.5200 +0.00% +0.04% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2020 Prague 787.44 774.3400 +1.69% -29.42% Budapest 32833.13 32265.92 +1.76% -28.75% Warsaw 1550.33 1506.48 +2.91% -27.89% Bucharest 7663.22 7525.60 +1.83% -23.19% Ljubljana 737.25 716.62 +2.88% -20.37% Zagreb 1557.70 1504.98 +3.50% -22.79% Belgrade <.BELEX15 648.31 645.32 +0.46% -19.13% > Sofia 428.34 423.34 +1.18% -24.61% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 1.0180 0.0540 +167bps +5bps > 5-year <CZ5YT=RR 1.1380 -0.0590 +174bps -7bps > 10-year <CZ10YT=R 1.4910 0.0770 +191bps +6bps R> Poland 2-year <PL2YT=RR 0.9850 -0.0940 +164bps -10bps > 5-year <PL5YT=RR 1.3440 0.0520 +194bps +4bps > 10-year <PL10YT=R 1.7010 0.0000 +212bps -2bps R> FORWARD 3x6 6x9 9x12 3M interban k Czech Rep < 0.35 0.37 0.43 1.01 PRIBOR=> Hungary < 1.09 1.02 1.12 0.92 BUBOR=> Poland < 0.54 0.42 0.38 1.17 WIBOR=> Note: FRA are for ask prices quotes *************************************************** *********** (Additional reporting by Jason Hovet in Prague and Alan Charlish in Warsaw Editing by David Holmes )

UPDATE 1-CEE MARKETS-Forint pares losses after surprise cbank tightening

01 Apr 2020

(Updates prices) By Anita Komuves BUDAPEST, April 1 Hungary's forint rallied about 1% from record lows near 370 versus the euro on Wednesday after the central bank announced a new one-week deposit tender available to banks at its 0.9% base rate. Central Europe's worst performing currency in 2020 was still down 1% on the day at 365 versus the euro at 1404 GMT, but the bank's surprise announcement, representing a tightening of monetary policy, helped provide a floor. The region's stock markets and currencies weakened on Wednesday, with the Hungarian forint tumbling to a record low versus the euro as PMI data across the region fuelled worries of a deep recession caused by the coronavirus pandemic. The forint plunged to new record lows past 369 versus the euro earlier in the session and underperformed the region's other currencies. Market players said the underperformance was due to a combination of several factors, including dismal PMI data and the Hungarian government's move to secure open-ended special rights to fight the coronavirus that triggered a fresh wave of worries over democracy. The Hungarian currency has lost more than 9% of its value to the euro this year. Hungary's seasonally adjusted PMI fell to 29.1 in March from a revised 50.3 in February. A Budapest dealer said that one or two banks were heavily trying to buy foreign currency on Tuesday, dollars and euros. "The forint has been weakening since Parliament gave the government the right to rule by decree on Monday," another Budapest-based dealer said. Elsewhere, the Polish zloty was down 0.62% to trade at 4.5783 to the euro, while the Czech crown eased 0.26% to 27.390 against the euro. The Romanian leu was steady, trading at 4.833. The Czech Finance Ministry sold a record 87.4 billion crowns ($3.50 billion) of three bonds at auctions on Wednesday, following up on massive debt sales last week as it accelerates borrowing to combat the coronavirus outbreak. The Czech National Bank (CNB) cut interest rates by 125 basis points to 1.00% in two steps over 10 days in March and markets are betting on further cuts to come, which is spurring bond demand. Manufacturing activity in Poland, the region's largest economy, declined in March at the fastest rate since the 2008 global financial crisis. The IHS Markit PMI fell to 42.4 from 48.2 in February. Czech manufacturing business sentiment also plunged, to the lowest since May 2009. CEE SNAPSHO AT MARKETS T 1604 CET CURRENC IES Latest Previou Daily Change s bid close change in 2020 EURCZK Czech <EURCZK 27.3800 27.3200 -0.22% -7.11% = crown => EURHUF Hungary <EURHUF 365.000 360.800 -1.15% -9.28% = forint => 0 0 EURPLN Polish <EURPLN 4.5865 4.5500 -0.80% -7.20% = zloty => EURRON Romanian <EURRON 4.8327 4.8335 +0.02% -0.92% = leu => EURHRK Croatian <EURHRK 7.6260 7.6301 +0.05% -2.37% = kuna => EURRSD Serbian <EURRSD 117.460 117.530 +0.06% +0.09% = dinar => 0 0 Note: calculated from 1800 daily CET change Latest Previou Daily Change s close change in 2020 .PX Prague 771.25 789.880 -2.36% -30.87% 0 .BUX Budapest 32473.5 33134.8 -2.00% -29.53% 0 7 .WIG20 Warsaw <.WIG20 1475.73 1512.84 -2.45% -31.36% > .BETI Buchares 7432.81 7625.38 -2.53% -25.50% t .SBITO Ljubljan <.SBITO 727.00 733.34 -0.86% -21.48% P a P> .CRBEX Zagreb <.CRBEX 1471.92 1480.51 -0.58% -27.04% > .BELEX Belgrade <.BELEX 658.97 636.53 +3.53% -17.80% 15 15> .SOFIX Sofia <.SOFIX 417.00 419.35 -0.56% -26.60% > Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT= 2-year <CZ2YT= 0.8730 0.0730 +154bp +4bps RR RR> s CZ5YT= 5-year <CZ5YT= 1.2790 -0.0210 +190bp -5bps RR RR> s CZ10YT <CZ10YT 1.5250 0.0140 +199bp +2bps =RR 10-year =RR> s Poland PL2YT= 2-year <PL2YT= 1.0070 0.0850 +167bp +5bps RR RR> s PL5YT= 5-year <PL5YT= 1.3390 0.0440 +196bp +2bps RR RR> s PL10YT <PL10YT 1.7030 0.0180 +217bp +3bps =RR 10-year =RR> s FORWARD 3x6 6x9 9x12 3M interba nk Czech <CZKFRA 0.47 0.45 0.48 1.04 Rep ><PRIBO R=> Hungary <HUFFRA 0.79 0.83 0.75 0.47 ><BUBOR => Poland <PLNFRA 0.62 0.52 0.47 1.17 ><WIBOR => Note: are for ask FRA prices quotes (Additional reporting by Jan Lopatka in Prague; Editing by Jan Harvey and Elaine Hardcastle)

CEE MARKETS-Forint leads losses after dismal PMI numbers fuel recession fears

01 Apr 2020

By Anita Komuves BUDAPEST, April 1 Central European stock markets and currencies weakened on Wednesday, with the Hungarian forint tumbling to a record low versus the euro as PMI data across the region fuelled worries of a deep recession caused by the coronavirus pandemic. Manufacturing activity in Poland, the region's largest economy, declined in March at the fastest rate since the 2008 global financial crisis. The IHS Markit PMI fell to 42.4 from 48.2 in February. Czech manufacturing business sentiment also plunged, to the lowest since May 2009, while Hungary's seasonally adjusted PMI fell to 29.1 in March from a revised 50.3 in February. "We expected March data to be awful. The only question has been whether it's extremely awful or ultra awful," said Peter Virovacz, analyst at ING Bank in Budapest. "My GDP forecast (for Hungary) for this year is -1%, which two weeks ago was a worst case scenario, but is now the best case. I tend to expect closer to -3% now." All regional currencies eased, with the forint leading losses by falling to a record low of 364.41 to the euro. It was down 0.88% on the day at 364.00 by 0822 GMT. The Hungarian currency has lost more than 9% of its value to the euro this year, underperforming its regional peers. "The forint has been weakening since Parliament gave the government the right to rule by decree on Monday," a Budapest-based dealer said. "The market turned this into a question of trust. Also, liquidity is so tight and volatility is so high that it is easy to hit record lows," he added. Hungary's parliament on Monday granted Prime Minister Viktor Orban an open-ended right to rule by decree to fight the coronavirus, despite protest from the opposition and rights groups. Elsewhere, the Polish zloty was down 0.32% to trade at 4.564 to the euro, while the Czech crown eased 0.18% to 27.370 against the common currency. The Romanian leu was steady, trading at 4.834. Stock markets across the region also gave up their gains from the previous day, even as regional governments continued to announce steps to fight the economic effects of the coronavirus pandemic. Poland's parliament on Tuesday approved another part of a coronavirus rescue package to support the economy. Earlier the government said the whole package would amount to 212 billion zlotys ($50.7 billion). The Czech government approved more aid for companies affected by the coronavirus outbreak on Tuesday. Companies will be covered for most of the salaries they pay to employees if they retain them. The Czech Republic also holds another bond auction later on Wednesday following last week's massive sale, as it ramps up borrowing to finance a swelling budget amid the coronavirus outbreak. The finance ministry issued a record 123.9 billion crowns, or 5 billion euros, in bond and treasury bill auctions last week. "As was apparent last week, the demand for shorter end maturities is massive lately, most probably as (holders of) local real money are desperately looking for options to place the excessive cash, as they do not want to risk further CNB rate cuts," Dalimil Vyskovsky of Komercni Banka said in a note. The Czech central bank has announced two emergency rate cuts in the past two weeks in response to the coronavirus pandemic. The Polish and Romanian central banks have also cut rates. CEE SNAPSHOT AT MARKETS 1022 CET CURRENCIE S Latest Previous Daily Change bid close change in 2020 Czech 27.3700 27.3200 -0.18% -7.08% crown Hungary 364.0000 360.8000 -0.88% -9.03% forint Polish 4.5645 4.5500 -0.32% -6.75% zloty Romanian 4.8340 4.8335 -0.01% -0.95% leu Croatian 7.6240 7.6301 +0.08% -2.34% kuna Serbian 117.4300 117.5300 +0.09% +0.12% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2020 Prague 778.14 789.8800 -1.49% -30.25% Budapest 32582.63 33134.87 -1.67% -29.30% Warsaw 1487.32 1512.84 -1.69% -30.83% Bucharest 7466.58 7625.38 -2.08% -25.16% Ljubljana 732.43 733.34 -0.12% -20.89% Zagreb 1471.63 1480.51 -0.60% -27.05% Belgrade <.BELEX15 660.54 636.53 +3.77% -17.61% > Sofia 416.52 419.35 -0.67% -26.69% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 0.9910 0.1910 +167bps +17bps > 5-year <CZ5YT=RR 1.2300 0.0000 +189bps +1bps > 10-year <CZ10YT=R 1.5250 0.0000 +203bps +4bps R> Poland 2-year <PL2YT=RR 0.9440 0.0220 +162bps +0bps > 5-year <PL5YT=RR 1.3030 0.0080 +196bps +2bps > 10-year <PL10YT=R 1.6850 0.0000 +219bps +4bps R> FORWARD 3x6 6x9 9x12 3M interban k Czech Rep < 0.47 0.45 0.48 1.04 PRIBOR=> Hungary < 0.56 0.58 0.59 0.46 BUBOR=> Poland < 0.62 0.52 0.47 1.17 WIBOR=> Note: FRA are for ask prices quotes *************************************************** *********** (Additional reporting by Jan Lopatka in Prague; Editing by Jan Harvey)

CEE MARKETS-Stocks, currencies ease as optimism over stimulus measures loses steam

30 Mar 2020

By Anita Komuves BUDAPEST, March 30 Central European stock indexes fell and currencies eased on Monday, as massive economic support packages aiming to shore up economies battered by the coronavirus pandemic failed to reassure markets. "The negative mood could last until the number of cases starts dropping globally," a trader in Budapest said. "More liquidity could be a solution in the short term but in the long term it will not be able to fix the problem that people simply cannot go to work." There were more than 720,000 confirmed cases of coronavirus worldwide by Monday, and governments around the world kept announcing stricter lockdown measures to combat the spread of the virus, further halting economic activity. "The CEE region looks so far more vulnerable than many other EM economies amid the corona recession," Nordea said in a note. The reason for this, the note adds, is that economies of these countries are based on exports to the European Union, which has become the epicentre of the spread of the virus. Budapest's equities led losses by dropping 2.8% by 0758 GMT. Warsaw's stock market was down 1.8% and Bucharest lost 1.5%. Czech stocks slipped with the rest of the region and were down 2.1%. Prague-listed banking shares were under pressure after the finance ministry said it was preparing a bill that could mean a six-month blanket moratorium on mortgage, consumer and business loan payments. J&T Banka analysts said it was still difficult to assess the exact impact and that benefits from the measures could also come. Regional central banks and governments have taken several emergency steps recently to help their economies. The Polish and the Romanian central banks have delivered emergency rate cuts, and the Czech central bank cut rates on Thursday for the second time in two weeks. In Poland, another interest rate cut might be considered to support the economy during the coronavirus outbreak, Polish rate-setter Eryk Lon said on Monday. The central bank in Hungary left its benchmark lending rate at 0.9% last week and introduced a fixed-rate collateralised loan instrument with unlimited liquidity, in addition to other liquidity-supporting measures. Regional currencies eased, with the Hungarian forint leading losses by dropping 0.69% and trading at 358.03 to the euro. The Czech crown was down 0.46% at 27.425 to the euro while the Polish zloty slipped 0.16% to 4.537 to the euro. CEE SNAPSHOT AT MARKETS 0958 CET CURRENCIE S Latest Previous Daily Change bid close change in 2020 Czech 27.4250 27.3000 -0.46% -7.27% crown Hungary 358.0300 355.5500 -0.69% -7.51% forint Polish 4.5373 4.5299 -0.16% -6.19% zloty Romanian 4.8366 4.8375 +0.02% -1.00% leu Croatian 7.6120 7.6145 +0.03% -2.19% kuna Serbian 117.4600 117.4300 -0.03% +0.09% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2020 Prague 764.98 781.2300 -2.08% -31.43% Budapest 31170.63 32065.14 -2.79% -32.36% Warsaw 1449.98 1475.90 -1.76% -32.56% Bucharest 7414.22 7528.93 -1.52% -25.69% Ljubljana 722.60 726.82 -0.58% -21.95% Zagreb 1447.90 1457.57 -0.66% -28.23% Belgrade <.BELEX15 640.79 637.63 +0.50% -20.07% > Sofia 418.07 421.68 -0.86% -26.41% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 1.0600 0.0800 +178bps +11bps > 5-year <CZ5YT=RR 1.2240 -0.1460 +192bps -11bps > 10-year <CZ10YT=R 1.5540 0.1370 +209bps +18bps R> Poland 2-year <PL2YT=RR 0.9720 -0.1900 +170bps -16bps > 5-year <PL5YT=RR 1.3940 0.0080 +209bps +5bps > 10-year <PL10YT=R 1.8210 -0.0090 +235bps +4bps R> FORWARD 3x6 6x9 9x12 3M interban k Czech Rep < 0.57 0.47 0.48 1.08 PRIBOR=> Hungary < 0.36 0.35 0.39 0.45 BUBOR=> Poland < 0.70 0.54 0.47 1.17 WIBOR=> Note: FRA are for ask prices quotes *************************************************** *********** (Additional reporting by Jason Hovet in Prague; Editing by Alex Richardson)

CEE MARKETS-Stocks retreat, Czech government ramps up debt sales

27 Mar 2020

By Anita Komuves BUDAPEST, March 27 Central European stock markets retreated on Friday as an upswing fuelled by the massive economic support package in the United States ran out of steam, with fears over the coronavirus pandemic gripping investors. "Some willingness to take risks have appeared in markets, but it is too early to draw conclusions in the long-term as the coronavirus is still spreading fast in a lot of places in the world," Erste Bank said in a note in Hungary. Stock indexes in Prague and Budapest were down more than 1.2%. Warsaw's equities lost 0.6%. Stocks in Bucharest were up 0.6% by 0857 GMT. Regional central banks and governments continue to take steps to help their economies while introducing more measures to stop the spread of the virus. Hungarian Prime Minister Viktor Orban announced Friday morning that Hungary is imposing a two-week lockdown starting Saturday. Orban also announced that his government will present its action plan to restart the economy sometime in the first or second week of April. The central bank of Hungary left its benchmark lending rate at 0.9% on Tuesday and introduced a new fixed-rate collateralised loan instrument with unlimited liquidity. The forint led gains in the region by rising 0.45%, trading at 353.90 to the euro on Friday. "Present developments will keep the NBH uber-dovish through our forecast horizon," Tatha Ghose of Commerzbank said in a note. "And while the forint may enjoy modest recovery during the second half of this year, it is still likely to be one of the underperformers in the CEE region." Elsewhere, the Czech crown and the Polish zloty were up more than 0.2% and the Romanian leu was stable. "The upswing in market moods and the weakening of the dollar supported emerging currencies as well," CIB Bank said in a note. The Polish and the Romanian central banks have delivered emergency rate cuts, and the Czech central bank cut rates on Thursday for the second time in two weeks. After its first 50-basis-point cut, the bank lowered rates by 75 bps, more than expected. The Czech finance ministry also sold huge amounts in debt tenders as it ramps up borrowing to finance a swelling budget amid the coronavirus outbreak. The ministry issued a record 123.9 billion crowns, or 5 billion euros, in bond and treasury bill auctions on Wednesday and Thursday. Secondary market sales by the ministry also increased borrowing this week, said Dalimil Vyskovsky, a trader at Komercni Banka. "The MoF has managed to sell as much as 140bln in debt in just a week ... suggesting the QE might not be needed in the end," he said. "Though very likely without those (earlier suggestions of QE) being proclaimed the sales results would have probably been lighter," he added. CEE SNAPSHOT AT MARKETS 0957 CET CURRENCIE S Latest Previous Daily Change bid close change in 2020 Czech 27.2000 27.2770 +0.28% -6.50% crown Hungary 353.9000 355.4900 +0.45% -6.43% forint Polish 4.5392 4.5492 +0.22% -6.23% zloty Romanian 4.8345 4.8359 +0.03% -0.96% leu Croatian 7.6100 7.6125 +0.03% -2.16% kuna Serbian 117.4800 117.4900 +0.01% +0.08% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2020 Prague 791.90 801.5700 -1.21% -29.02% Budapest 32573.63 32994.30 -1.27% -29.32% Warsaw 1482.93 1492.01 -0.61% -31.03% Bucharest 7665.28 7622.75 +0.56% -23.17% Ljubljana 734.92 726.98 +1.09% -20.62% Zagreb 1469.11 1437.78 +2.18% -27.18% Belgrade <.BELEX15 638.57 638.63 -0.01% -20.35% > Sofia 424.80 423.07 +0.41% -25.23% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 0.8440 -0.3190 +151bps -29bps > 5-year <CZ5YT=RR 1.2270 -0.2510 +183bps -20bps > 10-year <CZ10YT=R 1.4650 0.0220 +189bps +7bps R> Poland 2-year <PL2YT=RR 0.9400 0.0130 +160bps +5bps > 5-year <PL5YT=RR 1.2790 -0.0170 +189bps +3bps > 10-year <PL10YT=R 1.7450 -0.0510 +217bps +0bps R> FORWARD 3x6 6x9 9x12 3M interban k Czech Rep < 0.54 0.40 0.35 1.72 PRIBOR=> Hungary < 0.36 0.32 0.33 0.47 BUBOR=> Poland < 0.68 0.52 0.50 1.17 WIBOR=> Note: FRA are for ask prices quotes *************************************************** *********** (Additional reporting by Jason Hovet in Prague, editing by Larry King)

CEE MARKETS-Stock markets give up early gains as virus fears eclipse U.S. stimulus

25 Mar 2020

(Updates markets, adds Czech bond auction, Hungary tender) By Anita Komuves and Jason Hovet BUDAPEST/PRAGUE, March 25 Early gains in Central European stock markets mostly melted away on Wednesday, as investors' optimism over a $2 trillion economic stimulus bill in the United States faded and fears over the coronavirus pandemic took hold of markets again. The U.S. stimulus package lifted market sentiment around the world earlier on Wednesday. It includes a large increase in unemployment insurance and hundreds of billions of dollars to aid companies harmed by the outbreak. Prague's equities were still up 2% on the day by 1315 GMT, after a more than 7% jump in the morning. Bucharest's index was up 2.2%, while stocks in Budapest were up less than 1% after an initial rise of more than 3%. Warsaw's stocks were down 0.88%. The Czech Finance Ministry sold a total of 53.4 billion crowns ($2.11 billion) of three types of bonds, several times more than planned, at a Wednesday auction as it ramps up borrowing. The government plans a five-fold increase in the 2020 state budget deficit to fight the economic impact of the coronavirus and is boosting bond issuance to finance it. One dealer said the demand was the largest ever and the amount sold showed the ministry needed the money. "They utilised demand in quite a fashion," the dealer said. Hungary's central bank announced its first new collateralised loan tenders on Wednesday, offering liquidity to banks at a fixed rate of 0.9% on various maturities. The bank offered one-week, 3-month, 6-month, 12-month loans, as well as loans for 3 years and 5 years to commercial banks. The results will be announced later on Wednesday. This was the first tender of the NBH's new liquidity-boosting instrument, which was announced on Tuesday. The bank left interest rates unchanged on Tuesday, as expected, and introduced the new fixed-rate collateralised loan instrument with unlimited liquidity. "This tool will be able to stabilize not only lending, but also the government securities market ... and this is what we have seen today," Deputy Governor Marton Nagy said, referring to a drop in yields, especially at the long end of the yield curve on Tuesday. Five- and 10-year government bond yields dropped in Hungary by more than 50 basis points on Tuesday before the NBH's announcements, anticipating the measures, analysts say. Yields on 10-year Hungarian bonds were up by 20 basis points on Wednesday, a fixed income trader in Budapest said. The Hungarian forint eased 0.14% on Wednesday and was trading at 355.00, continuing its slip from the day before in reaction to the NBH's measures. Central European governments have announced a series of emergency measures recently to counter the economic blow from lockdowns, production halts and disruption to business activity and supply chains. The Czech, Polish and Romanian central banks have cut their benchmark rates and announced steps to shore up economic activity. Elsewhere, the Czech crown was up, gaining 0.84% and trading at 27.463 to the euro. The zloty gained 0.53% and was trading at 4.582. The Romanian leu firmed 0.2% and was trading at 4.834 to the euro. CEE SNAPSHO AT MARKETS T 1415 CET CURRENC IES Latest Previou Daily Change s bid close change in 2020 EURCZK Czech <EURCZK 27.4630 27.6950 +0.84% -7.40% = crown => EURHUF Hungary <EURHUF 355.000 354.500 -0.14% -6.72% = forint => 0 0 EURPLN Polish <EURPLN 4.5823 4.6065 +0.53% -7.11% = zloty => EURRON Romanian <EURRON 4.8345 4.8445 +0.21% -0.96% = leu => EURHRK Croatian <EURHRK 7.6060 7.6115 +0.07% -2.11% = kuna => EURRSD Serbian <EURRSD 117.380 117.545 +0.14% +0.16% = dinar => 0 0 Note: calculated from 1800 daily CET change Latest Previou Daily Change s close change in 2020 .PX Prague 810.42 794.740 +1.97% -27.36% 0 .BUX Budapest 32820.2 32614.5 +0.63% -28.78% 0 6 .WIG20 Warsaw <.WIG20 1438.19 1451.02 -0.88% -33.11% > .BETI Buchares 7639.44 7472.17 +2.24% -23.43% t .SBITO Ljubljan <.SBITO 734.44 706.27 +3.99% -20.67% P a P> .CRBEX Zagreb <.CRBEX 1405.76 1403.99 +0.13% -30.32% > .BELEX Belgrade <.BELEX 629.80 616.31 +2.19% -21.44% 15 15> .SOFIX Sofia <.SOFIX 424.82 418.88 +1.42% -25.23% > Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT= 2-year <CZ2YT= 1.2750 0.0410 +188bp +1bps RR RR> s CZ5YT= 5-year <CZ5YT= 1.5240 0.0810 +201bp +6bps RR RR> s CZ10YT <CZ10YT 1.5320 -0.0220 +182bp -5bps =RR 10-year =RR> s Poland PL2YT= 2-year <PL2YT= 0.9560 0.0230 +156bp -1bps RR RR> s PL5YT= 5-year <PL5YT= 1.3640 0.0240 +185bp +0bps RR RR> s PL10YT <PL10YT 1.8810 0.0840 +217bp +5bps =RR 10-year =RR> s FORWARD 3x6 6x9 9x12 3M interba nk Czech <CZKFRA 0.69 0.40 0.47 1.74 Rep ><PRIBO R=> Hungary <HUFFRA 0.47 0.38 0.39 0.50 ><BUBOR => Poland <PLNFRA 0.63 0.47 0.46 1.17 ><WIBOR => Note: are for ask FRA prices quotes (Additional reporting by Jason Hovet in Prague and Alan Charlish in Warsaw; editing by Larry King and Alex Richardson)

CEE MARKETS-Stocks jump on U.S. stimulus, but virus crisis not over

25 Mar 2020

By Anita Komuves BUDAPEST, March 25 Central European stock markets rose, led by Prague, and regional currencies gained on Wednesday as the United States agreed on $2 trillion economic stimulus bill, lifting market sentiment around the world. The stimulus package includes a large increase in unemployment insurance and hundreds of billions of dollars to aid companies harmed by the coronavirus. "It is too early to open the champagne bottles, the plateau of the pandemic is well ahead of us," CIB bank said in a note. "And we will only be able to assess the damage to the real economy later." Central European governments have also announced a series of emergency measures recently to counter the economic blow from lockdowns, production halts and disruption to business activity and supply chains. The Czech, the Polish and the Romanian central banks have cut their benchmark rates. The National Bank of Hungary left interest rates unchanged on Tuesday, as expected, and announced further steps to boost liquidity. It introduced a new fixed-rate collateralised loan instrument with unlimited liquidity. The first tender of the new instrument will be held later on Wednesday. "This tool will be able to stabilize not only lending, but also the government securities market ... and this is what we have seen today," Deputy Governor Marton Nagy said, referring to a drop in yields, especially at the long end of the yield curve on Tuesday. Five- and 10-year government bond yields dropped in Hungary by more than 50 basis points on Tuesday before the NBH's announcements, anticipating the measures, analysts say. Yields on the 10-year Hungarian bonds were up by 20 basis points on Wednesday, an FI trader in Budapest said. "The market is disappointed because what the NBH announced is not proper QE, contrary to what is happening in neighboring countries," he said. The Hungarian forint gained 0.57% on Wednesday and was trading at 352.50 to the euro after slipping the day before as a reaction to the NBH's measures. Elsewhere, the Czech crown was also up, gaining 0.5% and trading at 27.557 to the euro. The zloty gained 0.66% and was trading at 4.576. The Romanian leu was stable. The Czech Republic holds a bond auction on Wednesday with results due after 1100GMT. "Today's bonds auction will be a first test of where demand currently is," Komercni Banka trader Dalimil Vyskovsky said in a note. "The finance ministry is offering a set of three bonds ... as the issuer seems to be trying to offer investors a wider range of instruments to test where demand will be strongest." Czech bond yields were dipping on Wednesday after a drop yesterday, correcting from a spike in the past few days. Regional stock indexes were up, with Prague's equities jumping more than 7% by 0857 GMT. Budapest and Bucharest were up by 3% and Warsaw's stocks gained nearly 3%. CEE SNAPSHOT AT MARKETS 0957 CET CURRENCIE S Latest Previous Daily Change bid close change in 2020 Czech 27.5570 27.6950 +0.50% -7.71% crown Hungary 352.5000 354.5000 +0.57% -6.06% forint Polish 4.5761 4.6065 +0.66% -6.99% zloty Romanian 4.8390 4.8445 +0.11% -1.05% leu Croatian 7.6090 7.6115 +0.03% -2.15% kuna Serbian 117.4900 117.5450 +0.05% +0.07% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2020 Prague 851.78 794.7400 +7.18% -23.65% Budapest 33758.50 32614.56 +3.51% -26.74% Warsaw 1494.06 1451.02 +2.97% -30.51% Bucharest 7719.84 7472.17 +3.31% -22.63% Ljubljana 739.98 706.27 +4.77% -20.08% Zagreb 1437.84 1403.99 +2.41% -28.73% Belgrade <.BELEX15 623.04 616.31 +1.09% -22.28% > Sofia 432.07 418.88 +3.15% -23.95% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 1.3210 0.0870 +192bps +5bps > 5-year <CZ5YT=RR 1.5120 0.0700 +199bps +4bps > 10-year <CZ10YT=R 1.5530 -0.0010 +185bps -3bps R> Poland 2-year <PL2YT=RR 0.9650 0.0320 +157bps +0bps > 5-year <PL5YT=RR 1.4220 0.0820 +190bps +5bps > 10-year <PL10YT=R 1.9420 0.1450 +224bps +12bps R> FORWARD 3x6 6x9 9x12 3M interban k Czech Rep < 0.69 0.40 0.35 1.76 PRIBOR=> Hungary < 0.45 0.42 0.33 0.55 BUBOR=> Poland < 0.55 0.42 0.44 1.17 WIBOR=> Note: FRA are for ask prices quotes *************************************************** *********** (Additional reporting by Jason Hovet in Prague and Alan Charlish in Warsaw; editing by Larry King)

UPDATE 1-CEE MARKETS-Hungarian central bank injects liquidity, forint slips

24 Mar 2020

(Recasts with Hungarian central bank, forint) By Alan Charlish and Anita Komuves WARSAW/BUDAPEST, March 24 The Hungarian forint weakened in late trade on Tuesday after the central bank launched measures to boost liquidity and left rates on hold, as the country's economy is pummelled by the coronavirus outbreak. Central Europe's most dovish central bank had faced calls to raise rates because of rising inflation, but the coronavirus has changed the terms of the monetary policy debate, with rate-setters around the world cutting the cost of borrowing. The Hungarian central bank left its benchmark rate unchanged at 0.9% and decided to introduce a new fixed-rate collateralised loan instrument with unlimited liquidity. It also cut its 2020 forecasts for gross domestic product (GDP) growth to 2.0-3.0% from 3.7% and inflation to 2.6-2.8% from 3.5%. The forint was down 1.21% against the euro at 356.62 at 1536 GMT, after having risen earlier in the day. The Polish zloty also gave up earlier gains, falling 0.07% on the day to 4.6144. The Czech crown was up 0.14% at 27.8000 and the Romanian leu gained 0.21% to 4.8399. Currencies and stocks had bounced in early trade after the U.S. Federal Reserve rolled out extraordinary measures to support the coronavirus-hit economy. On Monday, the Fed said it would back purchases of corporate bonds, backstop direct loans to companies and expand its asset purchases by as much as needed to stabilise financial markets. A Warsaw-based equity trader said all markets were rebounding, mostly because of the Fed's decision. At 1536 GMT Warsaw's blue-chip WIG 20 index was up 3.19%, Prague's PX index was up 7.73% and Budapest's main index was up 5.98%. On Monday, Poland's central bank repurchased bonds worth 5.6 billion zlotys, the second such operation in as many weeks, to try to support the economy during the coronavirus outbreak. Polish benchmark 10-year bond yields were down almost 13 basis points at 1.7570%. Czech 10-year yields were down over 10 basis points at 1.5540%. CEE SNAPSHOT AT MARKETS 1636 CET CURRENCI ES Latest Previous Daily Change bid close change in 2020 Czech 27.8000 27.8395 +0.14% -8.52% crown Hungary 356.6200 352.3200 -1.21% -7.14% forint Polish 4.6144 4.6113 -0.07% -7.76% zloty Romanian 4.8399 4.8503 +0.21% -1.07% leu Croatian 7.6140 7.6014 -0.17% -2.21% kuna Serbian 117.5200 117.5500 +0.03% +0.04% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2020 Prague 795.32 738.2800 +7.73% -28.71% Budapest 32691.94 30848.56 +5.98% -29.06% Warsaw 1450.30 1405.45 +3.19% -32.55% Bucharest 7406.96 7038.95 +5.23% -25.76% Ljubljana 706.27 685.52 +3.03% -23.72% Zagreb 1403.99 1364.98 +2.86% -30.41% Belgrade <.BELEX15 616.31 606.62 +1.60% -23.12% > Sofia 418.88 406.90 +2.94% -26.27% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 1.3440 -0.0110 +198bps -7bps > 5-year <CZ5YT=RR 1.4430 -0.1240 +195bps -17bps > 10-year <CZ10YT=R 1.5540 -0.1060 +188bps -15bps R> Poland 2-year <PL2YT=RR 0.9330 -0.0020 +157bps -6bps > 5-year <PL5YT=RR 1.3040 -0.1180 +181bps -16bps > 10-year <PL10YT=R 1.7570 -0.1280 +209bps -18bps R> FORWARD 3x6 6x9 9x12 3M interban k Czech Rep < 0.72 0.34 0.31 1.76 PRIBOR=> Hungary < 0.45 0.42 0.33 0.55 BUBOR=> Poland < 0.51 0.40 0.37 1.18 WIBOR=> Note: FRA are for ask prices quotes ************************************************** ************ (Reporting by Alan Charlish in Warsaw and Anita Komuves in Budapest; editing by Barbara Lewis)

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