May 18, 2020 / 9:51 AM / 19 days ago

CEE MARKETS-Stocks, currencies rise on optimism over economies re-opening from virus freeze

    By Anita Komuves
    BUDAPEST, May 18 (Reuters) - Central European stocks and
currencies firmed on Monday, helped by a risk-on mood in global
markets and further easing of lockdown measures in the region,
raising hopes for economic recovery.
    The Hungarian government started easing restrictions in the
capital on Monday morning. The government will submit a proposal
to parliament on May 26 to end its special coronavirus emergency
powers.
    "There is a modest optimism in markets due to the
re-openings," a currency trader in Budapest said. "Economies
could re-start a little bit, which could calm down markets."
    Regional currencies edged higher. The Polish zloty
added 0.15% and was trading at 4.563 versus the euro. The
Hungarian forint gained 0.11% and was trading at
354.100 to the euro. The Czech crown rose 0.22%.
    Czech health officials announced on Friday the country will
take major steps to relax lockdown measures from May 25, opening
restaurants, hotels and pools and allowing gatherings of
hundreds of people.
    Poland has been steadily loosening some coronavirus
restrictions in recent weeks, and Prime Minister Mateusz
Morawiecki said on Saturday that miners in Silesia will be able
to return to work this week.
    Some analysts said caution was still justified given the
German economic data posted at the end of last week which
signalled a gloomy outlook for the second quarter. 
    "Given the revision to Germany's fourth quarter performance,
Europe's largest economy is in a recession," Raiffeisen bank
said in a note. "This is only an indication of the dire economic
picture we will see in the second quarter. Hence, we remain
cautious in the short-term with respect to CEE FX."
    Preliminary first-quarter GDP data on Friday showed that CEE
economies, which have close trade links with the euro zone,
primarily Germany, fell as much as 5% on a quarterly basis,
indicating the initial impact of the lockdown measures. 
    The numbers showed that the COVID-19 pandemic will undo
several years of solid growth in a region with economies highly
tuned to the car industry and exports.
    CEE stock markets firmed, with Budapest leading gains
by adding 2.6% by 0919 GMT, helped by a rally of OTP Bank
 shares which jumped 5%. OTP executive chairman Sandor
Csanyi said on Inforadio late on Friday that OTP would be
profitable this year and the bank sector was stable, while the
stock was undervalued.  
    Warsaw was up 1.7% at 0800 GMT, Prague
equities firmed 1.2% while Bucharest's blue chip index
gained 0.9%.
      

            CEE        SNAPSHOT    AT                         
            MARKETS               0956 CET            
                       CURRENCIE                              
                       S                              
                       Latest     Previous  Daily     Change
                       bid        close     change    in 2020
 Czech                   27.6550   27.7150    +0.22%    -8.04%
 crown                                                
 Hungary                354.1000  354.5000    +0.11%    -6.48%
 forint                                               
 Polish                   4.5630    4.5700    +0.15%    -6.72%
 zloty                                                
 Romanian                 4.8400    4.8415    +0.03%    -1.07%
 leu                                                  
 Croatian                 7.5590    7.5622    +0.04%    -1.50%
 kuna                                                 
 Serbian                117.4700  117.5900    +0.10%    +0.09%
 dinar                                                
 Note:      calculated from                 1800 CET          
 daily                                                
 change                                               
                                                              
                       Latest     Previous  Daily     Change
                                  close     change    in 2020
 Prague                   877.90  867.4400    +1.21%   -21.31%
 Budapest               34692.35  34046.13    +1.90%   -24.72%
 Warsaw                  1599.29   1572.55    +1.70%   -25.62%
 Bucharest               8248.49   8174.10    +0.91%   -17.33%
 Ljubljana                821.11    815.47    +0.69%   -11.31%
 Zagreb                  1553.34   1546.46    +0.44%   -23.00%
 Belgrade   <.BELEX15     662.86    667.14    -0.64%   -17.32%
            >                                         
 Sofia                    448.54    450.13    -0.35%   -21.05%
                                                              
                       Yield      Yield     Spread    Daily
                       (bid)      change    vs Bund   change
                                                      in
 Czech                                                spread
 Republic                                             
   2-year   <CZ2YT=RR     0.1120   -0.0420   +086bps     -2bps
            >                                         
   5-year   <CZ5YT=RR     0.3830   -0.0470   +113bps     -2bps
            >                                         
   10-year  <CZ10YT=R     0.9280    0.1470   +148bps    +17bps
            R>                                        
 Poland                                                       
   2-year   <PL2YT=RR     0.4970   -0.0020   +125bps     +2bps
            >                                         
   5-year   <PL5YT=RR     0.8540    0.0010   +160bps     +3bps
            >                                         
   10-year  <PL10YT=R     1.3030   -0.0060   +185bps     +2bps
            R>                                        
            FORWARD                                           
                       3x6        6x9       9x12      3M
                                                      interban
                                                      k
 Czech Rep          <       0.19      0.20      0.20      0.34
            PRIBOR=>                                  
 Hungary            <       0.94      0.91      0.87      1.05
            BUBOR=>                                   
 Poland             <       0.33      0.30      0.28      0.68
            WIBOR=>                                   
 Note: FRA  are for ask prices                                
 quotes                                               
 
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