CEE MARKETS-Stocks gain to end worst month since 2008 crisis, FX firmer

Reuters
Updated ·4 min read

PRAGUE, March 31 (Reuters) - Central European stock markets regained some ground on Tuesday after Chinese data offering some relief for global investors, but remained on course for their biggest monthly drop since the 2008 financial crisis. Currencies in the region also firmed at the end of a punishing month that has seen sharp falls as investors seek safety amid the coronavirus outbreak around the world. Prague stocks are down 19% in March even after climbing 2.6% on Tuesday. Polish blue-chip stocks gained 2.1% on the day to trim monthly losses to 14.7%. Budapest led the region with a 4.8% rise in Tuesday's session - while remaining 16.7% in the hole for March - as pharmaceutical company Richter gained 4.8% after a deal with Myovant Sciences on uterine fibroid medicine. "I still think that we are in a downward trend," a Budapest-based trader said on the overall market. "This is exactly the level where we were four or five days ago." Governments in the region have been racing to provide relief to businesses and factories forced to close, hurting state revenue and boosting spending. Romanian bond yields have risen as the government seeks to contain its budget deficit. Finance Minister Florin Citu said on Monday the gap could exceed 5% of economic output in 2020. Asked whether Romania would seek an International Monetary Fund loan this year, as it did during the financial crisis more than a decade ago, Citu said "I am not considering it at the moment". Raiffeisen bank analysts said while refinancing risks in Romania were rising, its bond auctions have gone well, boosted by a central bank pledge to buy state bonds from secondary markets. On currency markets, the Czech crown rose 0.6% to trade at 27.295 to the euro. It had fallen as much as 8% in March and was down 6.8% since the end of February on Tuesday. Czech National Bank Governor Jiri Rusnok said in a Hospodarske Noviny newspaper interview on Tuesday the bank was ready to cut interest rates further if needed, though the likelihood of using negative rates is close to zero. Elsewhere, the Polish zloty inched up 0.1% and Hungarian forint by 0.15%. CEE SNAPSHOT AT MARKETS 1125 CET CURRENCIES Latest Previou Daily Change s bid close change in 2020 EURCZK Czech <EURCZK 27.2950 27.4650 +0.62% -6.83% = crown => EURHUF Hungary <EURHUF 358.7000 359.235 +0.15% -7.68% = forint => 0 EURPLN Polish <EURPLN 4.5480 4.5525 +0.10% -6.41% = zloty => EURRON Romanian <EURRON 4.8275 4.8298 +0.05% -0.81% = leu => EURHRK Croatian <EURHRK 7.6145 7.6315 +0.22% -2.22% = kuna => EURRSD Serbian <EURRSD 117.4300 117.500 +0.06% +0.12% = dinar => 0 Note: calculated from 1800 daily CET change STOCKS Latest Previou Daily Change s close change in 2020 .PX Prague 790.13 770.440 +2.56% -29.18% 0 .BUX Budapest 33529.34 31985.3 +4.83% -27.24% 3 .WIG20 Warsaw <.WIG20 1508.37 1477.65 +2.08% -29.85% > .BETI Buchares 7632.74 7483.17 +2.00% -23.50% t .SBITO Ljubljan <.SBITO 746.12 723.11 +3.18% -19.41% P a P> .CRBEX Zagreb <.CRBEX 1474.72 1450.02 +1.70% -26.90% > .BELEX Belgrade <.BELEX 636.53 636.18 +0.06% -20.60% 15 15> .SOFIX Sofia <.SOFIX 421.00 420.07 +0.22% -25.90% > BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT= 2-year <CZ2YT= 0.9310 -0.0570 +162bp -8bps RR RR> s CZ5YT= 5-year <CZ5YT= 1.2480 -0.0110 +190bp -5bps RR RR> s CZ10YT <CZ10YT 1.3670 0.0000 +184bp -5bps =RR 10-year =RR> s Poland PL2YT= 2-year <PL2YT= 0.9670 0.0100 +165bp -1bps RR RR> s PL5YT= 5-year <PL5YT= 1.3350 0.0130 +199bp -2bps RR RR> s PL10YT <PL10YT 1.7490 0.0020 +223bp -5bps =RR 10-year =RR> s FORWARD 3x6 6x9 9x12 3M interba nk Czech <CZKFRA 0.52 0.42 0.46 1.04 Rep ><PRIBO R=> Hungary <HUFFRA 0.42 0.45 0.51 0.46 ><BUBOR => Poland <PLNFRA 0.64 0.55 0.50 1.17 ><WIBOR => Note: FRA quotes are for ask prices *********************************************** *************** (Reporting by Jason Hovet in Prague, Luiza Ilie in Bucharest and Anita Komuves in Budapest; Editing by Andrew Cawthorne)