CEE MARKETS-Forint jumps as Hungary central bank increases firepower

 (Updates after Hungary c.bank)
    By Jason Hovet and Anita Komuves
    PRAGUE/BUDAPEST, April 7 (Reuters) - The forint jumped to a
one-week peak to lead central Europe higher on Tuesday as
investor hopes that the corovavirus spread could start to level
out boosted riskier assets and Hungary's central bank launched
measures to soothe financial markets.
    The Hungarian central bank (NBH) raised its overnight
collateralised loan rate and one-week collateralised loan rate
and also said it would launch government bond purchases on the
secondary market, which dealers said would help push yields
    "It is obvious that the NBH is very determined to do what
they have been saying for a while, that is, to flatten the far
end of the curve and bring yields under 3% there," a trader
    Capital Economics said "alarm bells seem to be ringing" in a
note on the measures. 
    The action goes along with a government push that will cause
the budget deficit to swell to 2.7% of gross domestic product
this year from a targeted 1%. Prime Minister Viktor Orban said
on Monday the stimulus, which includes subsidised loans to
Hungarian companies and funds to preserve jobs, would amount to
18%-20% of GDP, including central bank programmes.   
    The forint doubled gains in the afternoon after
the central bank, trading 2% up at 356.80to the euro by 1350
GMT, further away from a record low of 369.54 hit on April 1.
    The currency has been one of the hardest hit in central
Europe by investor flight, even before the coronavirus outbreak
hit the region in force in March. However, a Reuters poll last
week forecast a steady rebound starting in the region.
    The Czech crown was up 1.3% at 27.200 to the euro
on Tuesday, leaving behind multi-year lows hit in recent weeks.
Poland's zloty added 0.8%. 
    Stock markets also gained as tapering of the coronavirus
toll in certain European and U.S. hotspots boosted risk
appetite. Warsaw rose 3.8% and Budapest was up
    Analysts remain cautious as data will only start to show the
outbreak's impact on central Europe's export-driven economies
that have faced factory shutdowns in recent weeks and face
hardship similar to the 2008 global financial crisis.

    On bond markets, Czech yields were mixed after the finance
ministry announced on Monday unscheduled bond auctions for
Wednesday as it ramps up borrowing.
    Dealers have said demand remains solid for Czech paper,
helped by expectations of the central bank further cutting
interest rates after a reduction of 125 basis points last month.

                   CEE      SNAPSHO   AT                      
                   MARKETS  T        1550              
                            Latest   Previou  Daily    Change
                            bid      close    change   in 2020
 EURCZK  Czech     <EURCZK  27.2000  27.5500   +1.29%   -6.50%
 =       crown     =>                                  
 EURHUF  Hungary   <EURHUF  356.800  363.780   +1.96%   -7.19%
 =       forint    =>             0        0           
 EURPLN  Polish    <EURPLN   4.5268   4.5626   +0.79%   -5.97%
 =       zloty     =>                                  
 EURRON  Romanian  <EURRON   4.8320   4.8295   -0.05%   -0.90%
 =       leu       =>                                  
 EURHRK  Croatian  <EURHRK   7.6295   7.6265   -0.04%   -2.41%
 =       kuna      =>                                  
 EURRSD  Serbian   <EURRSD  117.550  117.600   +0.04%   +0.02%
 =       dinar     =>             0        0           
         Note:     calcula                    1800            
         daily     ted                        CET      
         change    from                                
                            Latest   Previou  Daily    Change
                                     close    change   in 2020
 .PX     Prague              832.71  807.950   +3.06%  -25.36%
 .BUX    Budapest           33948.0  32858.7   +3.32%  -26.33%
                                  8        5           
 .WIG20  Warsaw    <.WIG20  1640.40  1581.05   +3.75%  -23.71%
 .BETI   Buchares           8080.20  7706.49   +4.85%  -19.01%
 .SBITO  Ljubljan  <.SBITO   780.64   735.66   +6.11%  -15.68%
 P       a         P>                                  
 .CRBEX  Zagreb    <.CRBEX  1591.14  1581.19   +0.63%  -21.13%
 .BELEX  Belgrade  <.BELEX   672.38   664.25   +1.22%  -16.13%
 15                15>                                 
 .SOFIX  Sofia     <.SOFIX   434.60   427.78   +1.59%  -23.50%
                            Yield    Yield    Spread   Daily
                            (bid)    change   vs Bund  change
         Czech                                         spread
 CZ2YT=    2-year  <CZ2YT=   1.0070   0.0540   +164bp    +3bps
 RR                RR>                              s  
 CZ5YT=    5-year  <CZ5YT=   1.1740  -0.0210   +173bp    -8bps
 RR                RR>                              s  
 CZ10YT            <CZ10YT   1.5260   0.0950   +187bp    +0bps
 =RR     10-year   =RR>                             s  
 PL2YT=    2-year  <PL2YT=   0.9680  -0.1110   +160bp   -14bps
 RR                RR>                              s  
 PL5YT=    5-year  <PL5YT=   1.2880  -0.0040   +185bp    -6bps
 RR                RR>                              s  
 PL10YT            <PL10YT   1.6230  -0.0360   +196bp   -13bps
 =RR     10-year   =RR>                             s  
                            3x6      6x9      9x12     3M
         Czech     <CZKFRA     0.36     0.38     0.46     1.01
         Rep       ><PRIBO                             
         Hungary   <HUFFRA     1.19     1.20     1.20     0.92
         Poland    <PLNFRA     0.58     0.45     0.44     1.17
         Note: FRA quotes                                     
         are for ask                                   
 (Reporting by Jason Hovet in Prague and Anita Komuves in
Budapest; editing by Nick Macfie)

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