January 2, 2020 / 10:29 AM / 19 days ago

CEE MARKETS-Budapest hits record high as stocks start 2020 with a bang

    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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