CEE MARKETS-Currencies stable, stocks rise as stimulus hopes lift sentiment

Credit: REUTERS/DAVID W CERNY

Central European currencies held stable and stock indices gained on Wednesday as global markets looked forward to further stimulus measures in the United States and better-than-expected European earnings reports lifted investor sentiment.

By Anita Komuves

BUDAPEST, Aug 5 (Reuters) - Central European currencies held stable and stock indices gained on Wednesday as global markets looked forward to further stimulus measures in the United States and better-than-expected European earnings reports lifted investor sentiment.

Budapest's stock index .BUX gained 1% and Prague's equities .PX rose 0.53%. Warsaw's assets .WIG20 led gains in the region, rising 1.15% by 0845 GMT.

Poland's two biggest banks, PKO BP PKO.WA and Bank Pekao PEO.WA, both reported better-than-expected second-quarter results. Pekao's shares were up 2.7% and PKO BP gained 0.76% by 0851 GMT.

Regional currencies were stable. The Czech crown EURCZK= gained 0.16% and was trading at 26.130 versus the euro before the central bank's rate meeting on Thursday. The bank is likely to keep interest rates on hold, according to a Reuters poll.

A majority of analysts polled by Reuters also expect Romania's central bank to keep its benchmark interest rate on hold at 1.75% at its next meeting, in August.

Since the bank cancelled its meeting schedule in March, it hasn't said when it will meet.

The Romanian leu EURRON= was unchanged on Wednesday. The Hungarian forint EURHUF= held steady at 346.20 per euro. The Polish zloty EURPLN= eased 0.07%, to 4.399 versus the common currency.

Yields on the longest-dated Hungarian government bonds have come down substantially, by around 40 basis points, since the central bank last month resumed its quantitative-easing programme, which was begun in early May and suspended after a few weeks.

The Hungarian central bank bought $34.09 million worth of 15-year and 20-year government bonds from local banks on Tuesday. Yields edged higher at that auction, which one trader said was a normal correction after the falls since the July rate meeting.

"There was a significant drop in yields on the two longest-dated bonds (15-year and 20-year) after the announcement of the central bank," an FI trader in Budapest said.

"Yields on 10-year bonds are also down, but that was also affected by international trends, by 10-year yields dropping in the U.S. and Germany."

According to the Eikon page of the Hungarian Debt Management Agency HUBONDFIX, the yield on the 20-year bond was 2.79% and 2.64% on the 15-year bond, each more than 40 basis points lower than before the announcement of the National Bank of Hungary in July.

CEE MARKETS

SNAPSHOT

AT 1045 CET

CURRENCIES

Latest

Previous

Daily

Change

bid

close

change

in 2020

EURCZK=

Czech crown

EURCZK=

26.1300

26.1730

+0.16%

-2.67%

EURHUF=

Hungary forint

EURHUF=

346.2000

346.2500

+0.01%

-4.35%

EURPLN=

Polish zloty

EURPLN=

4.3996

4.3965

-0.07%

-3.25%

EURRON=

Romanian leu

EURRON=

4.8335

4.8335

+0.00%

-0.94%

EURHRK=

Croatian kuna

EURHRK=

7.4657

7.4683

+0.03%

-0.27%

EURRSD=

Serbian dinar

EURRSD=

117.5100

117.5600

+0.04%

+0.05%

Note: daily change

calculated from

1800 CET

Latest

Previous

Daily

Change

close

change

in 2020

.PX

Prague

.PX

902.55

897.7700

+0.53%

-19.10%

.BUX

Budapest

.BUX

34748.07

34407.20

+0.99%

-24.60%

.WIG20

Warsaw

.WIG20

1832.24

1811.46

+1.15%

-14.78%

.BETI

Bucharest

.BETI

8511.10

8493.41

+0.21%

-14.70%

.SBITOP

Ljubljana

.SBITOP

843.19

850.22

-0.83%

-8.93%

.CRBEX

Zagreb

.CRBEX

1581.13

1581.13

+0.00%

-21.63%

.BELEX15

Belgrade

.BELEX15

657.79

664.62

-1.03%

-17.95%

.SOFIX

Sofia

.SOFIX

434.55

436.91

-0.54%

-23.51%

Yield

Yield

Spread

Daily

(bid)

change

vs Bund

change in

Czech Republic

spread

CZ2YT=RR

2-year

CZ2YT=RR

0.0640

0.0080

+077bps

+1bps

CZ5YT=RR

5-year

CZ5YT=RR

0.3590

-0.0180

+108bps

-2bps

CZ10YT=RR

10-year

CZ10YT=RR

0.8250

0.0180

+137bps

+1bps

Poland

PL2YT=RR

2-year

PL2YT=RR

0.1250

-0.0030

+083bps

+0bps

PL5YT=RR

5-year

PL5YT=RR

0.6580

-0.0060

+138bps

-1bps

PL10YT=RR

10-year

PL10YT=RR

1.2610

0.0020

+180bps

-1bps

FORWARD

3x6

6x9

9x12

3M interbank

Czech Rep

CZKFRAPRIBOR=

0.33

0.33

0.36

0.34

Hungary

HUFFRABUBOR=

0.62

0.60

0.60

0.60

Poland

PLNFRAWIBOR=

0.19

0.18

0.17

0.23

Note: FRA quotes

are for ask prices

**************************************************************

(Additional reporting by Alan Charlish in Warsaw and Luiza Ilie in Bucharest)

((komuves.anita@thomsonreuters.com (+36 70 795 8815))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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