CEE MARKETS-Vaccine hopes help stocks and currencies

Credit: REUTERS/BERNADETT SZABO

Central European stocks rose and some currencies firmed on Wednesday, as hopes for a potential COVID-19 vaccine outweighed concerns over increased U.S.-China tensions.

By Alan Charlish

WARSAW, July 15 (Reuters) - Central European stocks rose and some currencies firmed on Wednesday, as hopes for a potential COVID-19 vaccine outweighed concerns over increased U.S.-China tensions.

The experimental vaccine from U.S. firm Moderna Inc MRNA.O showed promise in an ongoing early-stage study, giving global investor sentiment a boost.

"News came from the United States that there were some good tests with a vaccine... the reaction on the stock market in Asia, in the futures, in the FX was quite clear and now the investors are quite upbeat on that," said Peter Virovacz, senior economist at ING in Hungary.

"This means there is some light at the end of the tunnel so that is the main reason for the strengthening of the currencies."

At 0914 GMT the Hungarian forint EURHUF= was 0.44% stronger against the euro at 353.90 and the Czech crown EURCZK= was 0.23% stronger at 26.63.

The Polish zloty EURPLN= was little changed at 4.4738 after having firmed slightly earlier in the session and the Romanian leu EURRON= was flat at 4.8440

Stocks were higher across the board, tracking global peers on hopes of a vaccine. Poland's WIG 20 .WIG20 index was the biggest gainer, rising 0.95%.

The top performer was CD Projekt CDR.WA which rose over 6% after chief executive Adam Kicinski told Parkiet daily he was not concerned about rival Ubisoft UBIP.PA launching "Assasin's Creed Valhalla" two days before the planned release of the company's flagship "Cyberpunk 2077" game.

"I think this a rebound from the over-reacted sell-off recently," said a Warsaw-based equity trader, adding that the Parkiet article was behind CD Projekt's gains.

The Czech Finance Ministry will hold a rare auction of euro-denominated bonds for the domestic market, offering up to 300 million euros of new 7-year zero-coupon paper. CNB08

"Since otherwise comparable papers of regional peers are traded with negative yields, it is entirely possible MinFin could borrow in EUR at rates close to or below zero," Komercni Banka trader Marek Lesko said in a client note.

Czech yields have dropped sharply since a spike at the start of the coronavirus pandemic in March. The yield on 7-year crown-denominated bonds CZ7YT=RR was bid at 0.75% on Wednesday morning, down more than 1 percentage point since hitting its peak in March.

Benchmark Polish ten-year yields PL10YT=RR were down 1 basis point at 1.357.

"In the coming days on the domestic debt market we can expect a continuation of the sideways trend and low volatility," PKO BP analysts wrote in a note.

CEE MARKETS

SNAPSHOT

AT 1114 CET

CURRENCIES

Latest

Previous

Daily

Change

bid

close

change

in 2020

EURCZK=

Czech crown

EURCZK=

26.6300

26.6910

+0.23%

-4.50%

EURHUF=

Hungary forint

EURHUF=

353.9000

355.4450

+0.44%

-6.43%

EURPLN=

Polish zloty

EURPLN=

4.4738

4.4735

-0.01%

-4.86%

EURRON=

Romanian leu

EURRON=

4.8440

4.8435

-0.01%

-1.15%

EURHRK=

Croatian kuna

EURHRK=

7.5325

7.5303

-0.03%

-1.16%

EURRSD=

Serbian dinar

EURRSD=

117.5300

117.5850

+0.05%

+0.03%

Note: daily change

calculated from

1800 CET

STOCKS

Latest

Previous

Daily

Change

close

change

in 2020

.PX

Prague

.PX

943.16

937.8400

+0.57%

-15.46%

.BUX

Budapest

.BUX

35126.89

35091.72

+0.10%

-23.77%

.WIG20

Warsaw

.WIG20

1788.46

1771.70

+0.95%

-16.82%

.BETI

Bucharest

.BETI

8465.31

8416.87

+0.58%

-15.15%

.SBITOP

Ljubljana

.SBITOP

868.47

867.83

+0.07%

-6.20%

.CRBEX

Zagreb

.CRBEX

1612.02

1606.64

+0.33%

-20.10%

.BELEX15

Belgrade

.BELEX15

654.27

654.10

+0.03%

-18.39%

.SOFIX

Sofia

.SOFIX

442.92

441.32

+0.36%

-22.04%

BONDS

Yield

Yield

Spread

Daily

(bid)

change

vs Bund

change in

Czech Republic

spread

CZ2YT=RR

2-year

CZ2YT=RR

0.1200

-0.0160

+079bps

-1bps

CZ5YT=RR

5-year

CZ5YT=RR

0.3530

-0.0570

+101bps

-4bps

CZ10YT=RR

10-year

CZ10YT=RR

0.8790

0.0140

+134bps

+3bps

Poland

PL2YT=RR

2-year

PL2YT=RR

0.1330

0.0010

+080bps

+1bps

PL5YT=RR

5-year

PL5YT=RR

0.7850

-0.0220

+144bps

-1bps

PL10YT=RR

10-year

PL10YT=RR

1.3570

-0.0120

+182bps

+1bps

FRA

3x6

6x9

9x12

3M interbank

Czech Rep

CZKFRAPRIBOR=

0.32

0.32

0.35

0.34

Hungary

HUFFRABUBOR=

0.67

0.66

0.65

0.70

Poland

PLNFRAWIBOR=

0.20

0.21

0.22

0.25

Note: FRA quotes are for ask prices

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

(Reporting by Alan Charlish in Warsaw, Jason Hovet in Prague, Anita Komuves in Budapest; Editing by Shailesh Kuber)

((alan.charlish@thomsonreuters.com; +48 22 104 25 27 ;))

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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