June 8, 2020 / 9:38 AM / a month ago

CEE MARKETS-Currencies ease on dismal economic data showing coronavirus shock

    By Anita Komuves
    BUDAPEST, June 8 (Reuters) - Central European currencies
weakened on Monday as fresh economic data from the region and
Europe as a whole underlined the severe economic damage caused
by the coronavirus pandemic, with Czech industrial output
plunging by 33.7% in April.
    Regional currencies were hammered by the economic damage
caused by the lockdown measures introduced in March. They
regained a significant part of their losses in the past two
weeks as global markets rallied.
    These gains dissipated on Monday as all regional currencies
eased after dismal economic data.
    The Hungarian forint was down 0.22%, trading at
344.20 to the euro. The Czech crown slipped 0.21% on
Monday, to 26.610 versus the common currency. 
    "The crown has already been exhausted by decent gains from
the past two weeks," a note from CSOB said.
    "Today's record drop in industry and above all a huge
deficit in foreign trade in April will not be good news." 
    Czech working-day-adjusted industrial output fell by 33.7%
year-on-year in April, data on Monday showed. The decline
included an 80% drop in the car sector. 
    Hungary's industrial output also plunged by an annual 36.8%
in April, according to data released on Friday, as the pandemic
sent the economy into free fall with car factories virtually
halting output.
    The zloty was down 0.14% on the day, at 4.4393 to
the euro.
    "The appreciation potential of the zloty against the euro
due to optimism in Europe has already been exhausted," PKO BP
said in a note. "The market will now be looking for reasons for
further profit taking. Such impulses may be provided by signs of
persistent weakness in European industry."
    The CEE region's economy is closely tied to Germany, where
industrial output dropped by 17.9% in April.               
    Stocks in Prague were up 0.6% and Hungarian equities
 gained 0.3%. Markets in Romania were closed for holidays.
    Warsaw's main index was down 1.3% by 0811 GMT. 
    Shares of state-run mining company JSW dropped 10%
after the government announced the closure of two coal mines
owned by JSW and 10 mines from PGG group for three weeks to stop
the spread of the coronavirus among miners.
      

            CEE        SNAPSHOT    AT                         
            MARKETS               1011 CET            
                       CURRENCIE                              
                       S                              
                       Latest     Previous  Daily     Change
                       bid        close     change    in 2020
 Czech                   26.6100   26.5550    -0.21%    -4.43%
 crown                                                
 Hungary                344.2000  343.4500    -0.22%    -3.79%
 forint                                               
 Polish                   4.4393    4.4330    -0.14%    -4.12%
 zloty                                                
 Romanian                 4.8380    4.8365    -0.03%    -1.03%
 leu                                                  
 Croatian                 7.5680    7.5715    +0.05%    -1.62%
 kuna                                                 
 Serbian                117.4700  117.5500    +0.07%    +0.09%
 dinar                                                
 Note:      calculated from                 1800 CET          
 daily                                                
 change                                               
                                                              
                       Latest     Previous  Daily     Change
                                  close     change    in 2020
 Prague                   963.59  957.5500    +0.63%   -13.63%
 Budapest               38094.47  37985.66    +0.29%   -17.33%
 Warsaw                  1818.93   1842.47    -1.28%   -15.40%
 Bucharest               8848.75   8848.75    +0.00%   -11.31%
 Ljubljana                872.79    873.49    -0.08%    -5.73%
 Zagreb                  1661.71   1657.17    +0.27%   -17.63%
 Belgrade   <.BELEX15     675.51    678.64    -0.46%   -15.74%
            >                                         
 Sofia                    468.63    467.21    +0.30%   -17.52%
                                                              
                       Yield      Yield     Spread    Daily
                       (bid)      change    vs Bund   change
                                                      in
 Czech                                                spread
 Republic                                             
   2-year   <CZ2YT=RR     0.1360    0.0290   +072bps     +2bps
            >                                         
   5-year   <CZ5YT=RR     0.5090    0.0080   +106bps     +1bps
            >                                         
   10-year  <CZ10YT=R     0.9620    0.0200   +125bps     +3bps
            R>                                        
 Poland                                                       
   2-year   <PL2YT=RR     0.2510   -0.0040   +084bps     -1bps
            >                                         
   5-year   <PL5YT=RR     0.8690    0.0800   +142bps     +9bps
            >                                         
   10-year  <PL10YT=R     1.4890    0.0240   +177bps     +4bps
            R>                                        
            FORWARD                                           
                       3x6        6x9       9x12      3M
                                                      interban
                                                      k
 Czech Rep          <       0.28      0.33      0.40      0.34
            PRIBOR=>                                  
 Hungary            <       0.79      0.76      0.69      0.90
            BUBOR=>                                   
 Poland             <       0.25      0.28      0.31      0.27
            WIBOR=>                                   
 Note: FRA  are for ask prices                                
 quotes                                               
 ***************************************************          
 ***********                                          
 
 (Additional reporting by Jason Hovet in Prague and Alan
Charlish in Warsaw
Editing by Mark Heinrich)
  
 
 
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