February 10, 2020 / 10:58 AM / 5 months ago

CEE MARKETS-Far from coronavirus fears, CEE assets post mild gains

    By Anita Komuves
    BUDAPEST, Feb 10 (Reuters) - Fears of an impact from the
coronavirus outbreak mostly bypassed emerging Europe early on
Monday, with the region considered a comparative backwater,
enabling most markets to rise slightly.
    The Hungarian forint moved sideways as investors
awaited key economic data later in the week and a swap tender
that the central bank has used to fine tune liquidity.
    Investors will keenly eye the National Bank of Hungary's
afternoon swap tender, which the bank has begun to cut back as
the forint has hit record lows and eased more than 2% against
the euro this year, underperforming regional peers.
    "If the NBH does not accept any bids again, the forint can
strengthen slightly," a Budapest-based trader said, adding that
the market awaited January inflation figures due out on Thursday
even more keenly than the tender.
    A significant uptick in the year-on-year inflation number
could lead to a negative effect on the forint, she said.
    Inflation may have accelerated to 4.3% in January from 4.0%
in December, according to a Reuters poll. That exceeds the NBH's
target range of 3% plus/minus 1%.
    Hungary's ultra-dovish central bank has kept interest rates
at a record low.  
    The Czech crown was a touch stronger, hanging on
the weak side of the pyschological 25 per euro level.
    The crown briefly broke that key level for the first time
since 2012 last week. Analysts at bank CSOB said the central
bank's surprise rate hike last week would continue to buoy the
currency even as the global market remained bearish. 
    The Czech central bank raised the main two-week repo rate by
25 basis points to 2.25%.
    While Asian and several European stock markets dropped on
Monday morning because of continuing global worries about the
coronavirus outbreak, most CEE markets posted gains. 
    Prague gained 0.2%, Budapest was up by 0.8%
while Romanian markets were up by 0.3%. Warsaw
was down by 0.6%. 
    
            CEE        SNAPSHOT   AT                         
            MARKETS              1140 CET            
                       CURRENCI                              
                       ES                            
                       Latest    Previous  Daily     Change
                       bid       close     change    in 2020
 Czech                  25.0180   25.0570    +0.16%    +1.65%
 crown                                               
 Hungary               337.9000  338.1000    +0.06%    -2.00%
 forint                                              
 Polish                  4.2686    4.2748    +0.15%    -0.29%
 zloty                                               
 Romanian                4.7660    4.7610    -0.10%    +0.47%
 leu                                                 
 Croatian                7.4518    7.4565    +0.06%    -0.09%
 kuna                                                
 Serbian               117.5000  117.5900    +0.08%    +0.06%
 dinar                                               
 Note:      calculated from                1800 CET          
 daily                                               
 change                                              
                                                             
                       Latest    Previous  Daily     Change
                                 close     change    in 2020
 Prague                 1113.25  1110.720    +0.23%    -0.21%
                                        0            
 Budapest              44854.21  44486.92    +0.83%    -2.67%
 Warsaw                 2097.93   2110.20    -0.58%    -2.43%
 Bucharest             10053.59  10025.59    +0.28%    +0.76%
 Ljubljana               978.93    978.16    +0.08%    +5.73%
 Zagreb                 2029.32   2027.35    +0.10%    +0.59%
 Belgrade   <.BELEX15    810.55    812.86    -0.28%    +1.11%
            >                                        
 Sofia                   572.80    569.62    +0.56%    +0.82%
                                                             
                       Yield     Yield     Spread    Daily
                       (bid)     change    vs Bund   change
                                                     in
 Czech                                               spread
 Republic                                            
   2-year   <CZ2YT=RR    1.9570    0.1370   +260bps    +15bps
            >                                        
   5-year   <CZ5YT=RR    1.6430   -0.0660   +226bps     -5bps
            >                                        
   10-year  <CZ10YT=R    1.5940    0.0570   +200bps     +8bps
            R>                                       
 Poland                                                      
   2-year   <PL2YT=RR    1.5260   -0.0060   +217bps     +0bps
            >                                        
   5-year   <PL5YT=RR    1.7520   -0.0160   +237bps     +0bps
            >                                        
   10-year  <PL10YT=R    2.0840    0.0000   +249bps     +2bps
            R>                                       
            FORWARD                                          
                       3x6       6x9       9x12      3M
                                                     interban
                                                     k
 Czech Rep          <      2.37      2.32      2.24      2.39
            PRIBOR=>                                 
 Hungary            <      0.34      0.42      0.50      0.32
            BUBOR=>                                  
 Poland             <      1.73      1.71      1.69      1.71
            WIBOR=>                                  
 Note: FRA  are for ask prices                               
 quotes                                              
 **************************************************          
 ************                                        
 
 (Additional reporting by Jason Hovet in Prague, Editing by
William Maclean)
  
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