WARSAW, Jan 2 (Reuters) - Central European stocks started the new decade on a positive note, with the Budapest stock exchange reaching a record high, after a report that the U.S. and China would sign a trade deal in January and China would further ease monetary policy. U.S. President Donald Trump said on Tuesday that Phase 1 of trade deal with China would be signed on Jan. 15 at the White House and China's central bank said on Wednesday it was cutting the amount of cash that banks must hold as reserves. "Today's trading could be determined by optimistic sentiment," brokerage Equilor said in a note. Budapest's main index had climbed 0.41% by 0928 GMT. Warsaw's WIG20 rose 0.99% and in Prague the PX index was up 0.52%. Bond yields also rose as investors abandoned safe-haven assets on hopes of a brighter outlook for the world economy in 2020. Czech 10-year yields were at their highest point since June, rising almost 3 basis points to 1.664%. Polish 10-year yields jumped 8.5 basis points to 2.15%. The Czech crown started the year near its strongest level against the euro since April 2018, hitting 25.405, despite a December Purchasing Managers' Index reading of 43.6, one of Czech manufacturing's worst contractions in over a decade. "The crown is entering the new year in good condition," CSOB said, adding a positive rate differential and easing global risks at the end of 2019 have helped it. The Polish zloty was little changed against the euro at 4.2559. The Hungarian forint gained 0.23% to 330.04. "The forint has been trading in a tight range versus the euro, between 330 and 332 for days, and we do not see change in this for the time being," said Equilor. Poland's manufacturing PMI came in at 48.0, above the 46.8 forecast of analysts in a Reuters poll. That suggested Polish manufacturing may have weathered one of its worst downturns in two decades and begun to recover. "The fall in orders is primarily due to abroad, while domestic orders are quite good ... This once again proves that domestic demand, and especially household consumption, is currently stabilising the Polish economy," Monika Kurtek, chief economist at Bank Pocztowy, wrote in a note. Hungary's seasonally adjusted PMI rose to 53.9 in December 2019 from a revised 53.1 in November, with rising production volumes and new orders. CEE MARKETS SNAPSHOT AT 1059 CET CURRENCIES Latest Previous Daily Change bid close change in 2020 EURCZK= Czech 25.4050 25.4240 +0.07% +0.11% crown EURHUF= Hungary 330.0000 331.1900 +0.36% +0.35% forint EURPLN= Polish 4.2575 4.2532 -0.10% -0.03% zloty EURRON= Romanian 4.7830 4.7860 +0.06% +0.11% leu EURHRK= Croatian 7.4440 7.4414 -0.03% +0.02% kuna EURRSD= Serbian 117.4700 117.5700 +0.09% +0.09% dinar Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2020 .PX Prague 1121.22 1115.6300 +0.50% +0.50% .BUX Budapest 46175.96 46082.82 +0.20% +0.20% .WIG20 Warsaw 2177.34 2150.09 +1.27% +1.27% .BETI Bucharest 9977.30 9977.30 +0.00% +0.00% .SBITOP Ljubljana 926.10 925.86 +0.03% +0.03% .CRBEX Zagreb 2022.94 2017.43 +0.27% +0.27% .BELEX15 Belgrade 801.69 801.69 +0.00% +0.00% .SOFIX Sofia 567.61 568.14 -0.09% -0.09% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT=RR 2-year 1.7570 0.1790 +235bp +18bps s CZ5YT=RR 5-year 1.4720 -0.0650 +194bp -6bps s CZ10YT=RR 10-year 1.6640 0.0280 +184bp +2bps s Poland PL2YT=RR 2-year 1.4740 -0.0250 +207bp -3bps s PL5YT=RR 5-year 1.8310 0.0250 +230bp +3bps s PL10YT=RR 10-year 2.1340 0.0690 +231bp +6bps s FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M interbank Czech Rep 2.28 2.28 2.26 2.18 Hungary 0.29 0.36 0.41 0.00 Poland 1.74 1.70 1.69 1.71 Note: FRA are for ask prices quotes (Reporting by Alan Charlish and Alicja Ptak in Warsaw, Krisztina Than in Budapest and Jason Hovet in Prague; editing by Larry King)
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