(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
lower.
"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
said.
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
3.3%.
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
CET
CURRENC
IES
Latest Previou Daily Change
s
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
STOCKS
Latest Previou Daily Change
s
close change in 2020
.PX Prague 832.71 807.950 +3.06% -25.36%
0
.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%
t
.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%
>
BONDS
Yield Yield Spread Daily
(bid) change vs Bund change
in
Czech spread
Republic
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
Poland
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
FRA
3x6 6x9 9x12 3M
interba
nk
Czech <CZKFRA 0.36 0.38 0.46 1.01
Rep ><PRIBO
R=>
Hungary <HUFFRA 1.19 1.20 1.20 0.92
><BUBOR
=>
Poland <PLNFRA 0.58 0.45 0.44 1.17
><WIBOR
=>
Note: FRA quotes
are for ask
prices
********************************************
******************
(Reporting by Jason Hovet in Prague and Anita Komuves in
Budapest; editing by Nick Macfie)
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