June 5, 2020 / 10:11 AM / a month ago

CEE MARKETS-Stocks, currencies higher despite dismal economic data

    By Anita Komuves
    BUDAPEST, June 5 (Reuters) - Central European stocks and
currencies rose on Friday as optimism returned to markets after
the European Central Bank announced a boost of its stimulus
program to mitigate the fall-out from the coronavirus pandemic.
    Assets firmed even as fresh data showed the lockdown
measures introduced to stop the spread of the virus have
hammered regional economies.
    Hungary's industrial output plunged by an annual rate of
36.8% in April, with car factories virtually halting production.
Czech retail sales slumped by 10.6% year-on-year in April, the
worst result on record. 
    The crisis caused by the virus weakened currencies in the
region as well, but the recent risk-on mood helped them regain a
significant part of their losses.
    The Czech crown, the Polish zloty and
the Hungarian forint each gained more than 0.2% on
Friday while the Romanian leu was stable.
    A Reuters poll on Friday showed that the Czech crown should
gain the most among central European currencies over the next
year as economies recover. Over the next 12 months, the crown
was seen gaining 3.6% to 25.705 to the euro.
    The forint was trading at 343.95 against the euro on Friday,
up 0.23%. 
    "Since the unexpected rate cut of the Polish central bank,
there has been a heavy trade flow in the zloty-forint pair,
which keeps the forint at its current (firmer) level", an FX
trader in Budapest said.
    "The forint is also waiting to hear from the national bank
about the policy direction they want to take," he said.
    Marton Nagy, deputy governor of the NBH, unexpectedly
resigned last week. The bank's managing director, Barnabas
Virag, has been nominated to replace him, sources told Reuters
on Friday.
    Poland's nationalist government won a vote of confidence in
parliament on Thursday which it unexpectedly called to shore up
its authority before a presidential election, prompting a slide
in the zloty.
    "The zloty managed to weaken as sharply as it had
strengthened towards the beginning of the week," a note from
Commerzbank said, adding that the currency simply could have
entered a high volatility period.   
    The zloty was trading at 4.428 versus the euro on Friday, up
0.23% on the day.
    
              CEE         SNAPSHOT    AT  0954                  
              MARKETS                CET                  
                          CURRENCIE                             
                          S                               
                          Latest     Previous    Daily    Change
                          bid        close       change   in
                                                          2020
 Czech crown                26.5800     26.6330   +0.20%  -4.32%
 Hungary                   343.9500    344.7500   +0.23%  -3.72%
 forint                                                   
 Polish                      4.4280      4.4383   +0.23%  -3.88%
 zloty                                                    
 Romanian                    4.8390      4.8380   -0.02%  -1.05%
 leu                                                      
 Croatian                    7.5690      7.5723   +0.04%  -1.63%
 kuna                                                     
 Serbian                   117.5400    117.6100   +0.06%   +0.03
 dinar                                                         %
 Note: daily  calculated from                    1800           
 change                                          CET      
                                                                
                          Latest     Previous    Daily    Change
                                     close       change   in
                                                          2020
 Prague                      947.97    932.4200   +1.67%  -15.03
                                                               %
 Budapest                  37612.11    37260.06   +0.94%  -18.38
                                                               %
 Warsaw                     1817.50     1786.58   +1.73%  -15.47
                                                               %
 Bucharest                  8979.02     9021.60   -0.47%  -10.01
                                                               %
 Ljubljana                   879.38      873.24   +0.70%  -5.02%
 Zagreb                     1673.94     1673.10   +0.05%  -17.03
                                                               %
 Belgrade                    678.01      678.32   -0.05%  -15.43
                                                               %
 Sofia                       462.36      462.10   +0.06%  -18.62
                                                               %
                          BONDS                                 
                          Yield      Yield       Spread   Daily
                          (bid)      change      vs Bund  change
                                                          in
 Czech                                                    spread
 Republic                                                 
   2-year                    0.1150      0.0290   +071bp   +1bps
                                                       s  
   5-year                    0.4940      0.0110   +104bp   -1bps
                                                       s  
   10-year    <CZ10YT=RR     0.9130      0.0820   +121bp   +6bps
              >                                        s  
 Poland                                                         
   2-year                    0.2390      0.0070   +083bp   -1bps
                                                       s  
   5-year                    0.8150      0.0250   +136bp   +0bps
                                                       s  
   10-year    <PL10YT=RR     1.4140      0.0260   +171bp   +0bps
              >                                        s  
              FORWARD     RATE       AGREEMENT                  
                          3x6        6x9         9x12     3M
                                                          interb
                                                          ank
 Czech Rep            <P       0.26        0.29     0.33    0.34
              RIBOR=>                                     
 Hungary              <B       0.79        0.76     0.71    0.90
              UBOR=>                                      
 Poland               <W       0.25        0.25     0.25    0.27
              IBOR=>                                      
 Note: FRA    are for ask prices                                
 quotes                                                   
 

 (Additional reporting by Alan Charlish in Warsaw
Editing by Mark Heinrich)
  
 
 
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