July 1, 2020 / 8:58 AM / 7 days ago

CEE MARKETS-Currencies gain as economic contraction seen slowing

    By Marton Dunai and Alan Charlish
    BUDAPEST/WARSAW, July 1 (Reuters) - Emerging European
currencies were mildly stronger on Wednesday amid indications
that the pace of the economic downturn was slowing, encouraging
investors after this year's coronavirus-induced shock.
    The downturn in central European manufacturing eased in June
as economies reopened after the coronavirus lockdown, purchasing
manager surveys showed on Wednesday, although the sector was
still contracting.
    "You can see that the economy is recovering and moods are
bouncing back from the bottom reached in April. Lifting the
lockdown also has a positive effect on moods in industry," said
Grzegorz Maliszewski, chief economist at Bank Millennium.
    The Czech crown continued to rebound, trading around 26.65
to the dollar after hitting a four-week low of 26.90 at the
start the week. 
    "The crown is starting to stabilise despite the further
spread of the pandemic," CSOB said, adding that the currency was
being helped by improving sentiment on equity markets. "The
currency pair is unlikely to try to test 27.00 EUR/CZK again."
    The Hungarian forint extended gains from Tuesday, recouping
some of its losses after last week's central bank decision to
cut rates. The bank also signalled of a further easing to offset
the economic impact of the coronavirus crisis.
    But a dealer in Budapest said forint trading was thin amid
portfolio adjustments in the middle of the year. "There is
little evidence to say the forint is recovering," he said.
    The Hungarian currency is still near an all-time low around
80 forints to the Polish zloty, he added.
    Stock market data was affected by a malfunctioning market
platform in Germany. Deutsche Boerse said the Frankfurt-based
electronic trading system Xetra had experienced a technical
issue that affected all securities traded on the platform.

    Financial data is listed below, omitting the usual stocks
data due to the Frankfurt technical issue:
    
            CEE        SNAPSHOT    AT  1012 CET                      
            MARKETS                                          
                       CURRENCIE                                     
                       S                                     
                       Latest     Previous         Daily     Change
                       bid        close            change    in 2020
 Czech                   26.6300          26.6580    +0.11%    -4.50%
 crown                                                       
 Hungary                353.9800         354.5900    +0.17%    -6.45%
 forint                                                      
 Polish                   4.4400           4.4449    +0.11%    -4.14%
 zloty                                                       
 Romanian                 4.8360           4.8380    +0.04%    -0.99%
 leu                                                         
 Croatian                 7.5645           7.5683    +0.05%    -1.57%
 kuna                                                        
 Serbian                117.5400         117.6000    +0.05%    +0.03%
 dinar                                                       
 Note:      calculated from                        1800 CET          
 daily                                                       
 change                                                      
                                                                     
                       Yield      Yield            Spread    Daily
                       (bid)      change           vs Bund   change
                                                             in
 Czech                                                       spread
 Republic                                                    
   2-year   <CZ2YT=RR     0.0930           0.0460   +078bps     +4bps
            >                                                
   5-year   <CZ5YT=RR     0.3240          -0.1390   +101bps    -15bps
            >                                                
   10-year  <CZ10YT=R     0.7790           0.0250   +122bps     +0bps
            R>                                               
 Poland                                                              
   2-year   <PL2YT=RR     0.1700           0.0000   +086bps     +0bps
            >                                                
   5-year   <PL5YT=RR     0.7620           0.0360   +145bps     +2bps
            >                                                
   10-year  <PL10YT=R     1.3990           0.0140   +184bps     -1bps
            R>                                               
            FORWARD                                                  
                       3x6        6x9              9x12      3M
                                                             interban
                                                             k
 Czech Rep          <       0.27             0.26      0.28      0.34
            PRIBOR=>                                         
 Hungary            <       0.63             0.59      0.57      0.74
            BUBOR=>                                          
 Poland             <       0.20             0.21      0.22      0.26
            WIBOR=>                                          
 Note: FRA  are for ask prices                                       
 quotes                                                      
 **********************************************************          
 ****                                                        
 
 (Additional reporting by Alicja Ptak in WARSAW, Jason Hovet in
PRAGUE; Editing by Edmund Blair)
  
 
 
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