March 20, 2020 / 10:35 AM / in 17 days

CEE MARKETS-Stocks, currencies jump on stimulus hopes; MOL surges 15%

    By Anita Komuves
    BUDAPEST, March 20 (Reuters) - Central European stock
indexes rebounded and currencies firmed on Friday as regional
governments and central banks announced measures to keep
economies afloat during border closures and major disruptions in
business activity.
    "Despite negative signals from Italy, where the number of
deaths due to the coronavirus pandemic exceeded the number of
deaths in China, Friday brings stabilization of sentiment in the
financial markets," Bank Millenium said in a note.
    Regional currencies jumped on Friday after most of them
plunged and some hit fresh record lows the day before. The
Hungarian forint, the Czech crown and the Polish zloty are all
down around 6% this year.      
    The Czech crown led gains in the region, it was up
2.67% on the day and was trading at 26.950 to the euro, as of
0958 GMT. The crown is still at five-year lows, at a level where
the currency traded between 2013 and 2017, when the Czech
central bank was pursuing a policy of intervention to keep it
weak. 
    "After correction on EURCZK, there is no interest to trade
now," a Prague-based dealer said. 
    Activity is still low, which exaggerates moves and the
market is "tired," he added. 
    The forint was up 2.22% on the day and traded at
350.20 to the euro. The currency hit a new record low of 359.50
to the euro on Thursday. 
    The Romanian leu was up 0.11% and was trading at
4.845 to the euro. The leu also fell to new lows on Thursday,
and leading the central bank to step into the foreign exchange
market on Thursday, according to dealers.
    Regional stock indexes surged on Friday after steep losses
at the beginning of the week. Budapest's equities led the
gains with 5.54%, with oil and gas group MOL shares
soaring almost 15% on a rise in oil prices and investor hopes
for stimulus measures worldwide.  
    Oil prices rose on Friday as the world's richest nations
poured unprecedented aid into the global economy to stop a
coronavirus-driven recession and U.S. President Donald Trump
hinted he may intervene in the price war between Saudi Arabia
and Russia.
    Prague and Warsaw also strengthened by about
5%. Bucharest's stocks gained 2.54%.
    Governments and central banks across the region took turns
announcing emergency steps to help their economies that are set
to be hit by the disruptions to business and daily life being
felt around the world as governments seek to contain the spread
of the new coronavirus that has infected more than 200,000
worldwide.
    Hungary's finance minister said on Thursday that the economy
will recover from the blow it suffered from the coronavirus
pandemic only very slowly and the ship has sailed for the
economy this year.
    The Czech and Polish central banks have delivered rate cuts
and Hungary's central bank on Thursday detailed more help to
banks, after a blanket moratorium on all household and business
loans imposed by the government until the end of this year.
    On bond markets, Poland's central bank bought back bonds
worth 2.66 billion zloty ($630.35 million) as part of a new
program. 
    Polish rate-setters sent mixed messages on Friday about the
possibility of new rate cuts: Lukasz Hardt was quoted saying
that there is no need to cut interest rates further, while
Grazyna Ancyparowicz sees a possibility of another interest rate
cut.  
    The Polish Finance Ministry on Thursday decided to lift the
systemic buffer for banks, in a move that will free up 30
billion zloty of fresh capital that may be spent on financing
businesses at the time of coronavirus epidemic.

    
            CEE        SNAPSHOT    AT                         
            MARKETS               1058 CET            
                       CURRENCIE                              
                       S                              
                       Latest     Previous  Daily     Change
                       bid        close     change    in 2020
 Czech                   26.9500   27.6690    +2.67%    -5.63%
 crown                                                
 Hungary                350.2000  357.9700    +2.22%    -5.44%
 forint                                               
 Polish                   4.5436    4.5633    +0.43%    -6.32%
 zloty                                                
 Romanian                 4.8455    4.8510    +0.11%    -1.18%
 leu                                                  
 Croatian                 7.6080    7.6145    +0.09%    -2.14%
 kuna                                                 
 Serbian                117.4600  117.5400    +0.07%    +0.09%
 dinar                                                
 Note:      calculated from                 1800 CET          
 daily                                                
 change                                               
                                                              
                       Latest     Previous  Daily     Change
                                  close     change    in 2020
 Prague                   746.31  709.1500    +5.24%   -33.10%
 Budapest               31128.34  29494.19    +5.54%   -32.45%
 Warsaw                  1541.37   1469.43    +4.90%   -28.31%
 Bucharest               7572.35   7384.75    +2.54%   -24.10%
 Ljubljana                716.96    702.12    +2.11%   -22.56%
 Zagreb                  1416.88   1373.50    +3.16%   -29.77%
 Belgrade   <.BELEX15     612.91    620.73    -1.26%   -23.55%
            >                                         
 Sofia                    414.85    405.80    +2.23%   -26.98%
                                                              
                       Yield      Yield     Spread    Daily
                       (bid)      change    vs Bund   change
                                                      in
 Czech                                                spread
 Republic                                             
   2-year   <CZ2YT=RR     1.4180    0.0350   +206bps     +2bps
            >                                         
   5-year   <CZ5YT=RR     1.5400    0.0510   +197bps     +9bps
            >                                         
   10-year  <CZ10YT=R     1.7350    0.0000   +199bps     +9bps
            R>                                        
 Poland                                                       
   2-year   <PL2YT=RR     1.2720    0.0470   +191bps     +3bps
            >                                         
   5-year   <PL5YT=RR     1.7090   -0.0490   +214bps     -2bps
            >                                         
   10-year  <PL10YT=R     2.1290   -0.0570   +239bps     +3bps
            R>                                        
            FORWARD                                           
                       3x6        6x9       9x12      3M
                                                      interban
                                                      k
 Czech Rep          <       0.78      0.42      0.36      1.80
            PRIBOR=>                                  
 Hungary            <       0.53      0.52      0.52      0.61
            BUBOR=>                                   
 Poland             <       0.72      0.67      0.65      1.19
            WIBOR=>                                   
 Note: FRA  are for ask prices                                
 quotes                                               
 
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