By Anita Komuves
April 8 (Reuters) - Central European currencies eased and
stock indexes lacked direction on Wednesday as the risk-on mood
in markets fuelled by the slowing spread of the coronavirus
appeared to lose steam.
The Czech crown, the Polish zloty and
the Hungarian forint were all down about 0.1% at 0817
GMT. The Hungarian forint traded at 357.90 versus the euro,
following a 2% jump on Tuesday.
The currency strengthened after the central bank
unexpectedly raised its collateralised loan rates, both to 1.85%
from 0.9%, on Tuesday and began a bond-buying programme along
with a massive lending programme for companies to support the
coronavirus-stricken economy. The bank kept its base rate and
overnight deposit rate unchanged.
Deputy Governor Marton Nagy said the National Bank of
Hungary's (NBH) steps could lead to a flattening of the yield
curve.
"Yields on all tenors are up 2 or 3 basis points today, but
I think that is not connected to the NBH's announcements and it
is not specific to Hungary" an FI dealer in Budapest said.
"We see a bit of a risk-off mood in Europe after the failed
deal on eurobonds last night," he added, referring to a
breakdown in EU negotiations over a coronavirus-rescue package
late Tuesday.
The NBH's 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 Polish central bank holds its rate-setting meeting later
today. The National Bank of Poland (NBP) cut its base rate by 50
basis points in March.
"Because of increased pressure on exchange rates in CEE,
which recently forced the Hungarian central bank to hike rates,
this meeting could now pass without any action by NBP," Tatha
Ghose of Commerzbank wrote in a note.
The Czech and the Romanian central banks have also cut rates
recently in response to the economic crisis caused by the
coronavirus.
The Czech finance ministry holds an unscheduled bond auction
later today. The ministry announced the auction on Monday as it
ramps up borrowing.
"We expect a solid demand ... as cash holders look into
switching from short term deposits to longer term elevated ASW
(asset swap) yielding government bonds," said Komercni Banka
trader Dalimil Vyskovsky in a client note.
"Though it is probably not sustainable to have more than 100
billion CZK demanded in every auction," he added.
Stock indexes in the region were mixed. Budapest's equities
gained more than 2%, while Warsaw's stocks were
up 0.8%. Prague's blue chip index was little moved and
Bucharest was down 0.8%.
CEE SNAPSHOT AT
MARKETS 1017 CET
CURRENCIE
S
Latest Previous Daily Change
bid close change in 2020
Czech 27.2060 27.1800 -0.10% -6.52%
crown
Hungary 357.9000 357.5000 -0.11% -7.48%
forint
Polish 4.5400 4.5362 -0.08% -6.25%
zloty
Romanian 4.8325 4.8334 +0.02% -0.91%
leu
Croatian 7.6248 7.6298 +0.07% -2.35%
kuna
Serbian 117.5300 117.5900 +0.05% +0.03%
dinar
Note: calculated from 1800 CET
daily
change
Latest Previous Daily Change
close change in 2020
Prague 820.12 820.3300 -0.03% -26.49%
Budapest 33423.26 32715.70 +2.16% -27.47%
Warsaw 1615.83 1603.50 +0.77% -24.85%
Bucharest 7953.50 8020.15 -0.83% -20.28%
Ljubljana 780.59 780.83 -0.03% -15.69%
Zagreb 1568.89 1596.93 -1.76% -22.23%
Belgrade <.BELEX15 673.30 672.38 +0.14% -16.01%
>
Sofia 433.24 433.39 -0.03% -23.74%
Yield Yield Spread Daily
(bid) change vs Bund change
in
Czech spread
Republic
2-year <CZ2YT=RR 0.9470 0.0000 +156bps +1bps
>
5-year <CZ5YT=RR 1.1520 0.0430 +171bps +7bps
>
10-year <CZ10YT=R 1.4540 0.0680 +180bps +10bps
R>
Poland
2-year <PL2YT=RR 0.9810 -0.1820 +160bps -17bps
>
5-year <PL5YT=RR 1.2780 0.0000 +184bps +2bps
>
10-year <PL10YT=R 1.6220 0.0080 +196bps +4bps
R>
FORWARD
3x6 6x9 9x12 3M
interban
k
Czech Rep < 0.36 0.38 0.46 1.01
PRIBOR=>
Hungary < 1.78 1.82 1.85 0.92
BUBOR=>
Poland < 0.59 0.46 0.44 1.17
WIBOR=>
Note: FRA are for ask prices
quotes
***************************************************
***********
(Additional reporting by Jason Hovet in Prague; Editing by Mark
Potter)
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