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CEE MARKETS-Currencies stable, stocks rise as stimulus…

By Anita Komuves BUDAPEST, Aug 5 – 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 gained 1% and Prague’s equities rose 0.53%. Warsaw’s assets led gains in the region, rising 1.15% by 0845 GMT. Poland’s two biggest banks, PKO BP and Bank Pekao , 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 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 was unchanged on Wednesday. The Hungarian forint held steady at 346.20 per euro. The Polish zloty 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, 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 SNAPSHO AT MARKETS T 1045 CET CURRENC IES Latest Previous Daily Change bid close change in 2020 EURCZK= Czech <EURCZK= 26.1300 26.1730 +0.16% -2.67% crown > EURHUF= Hungary <EURHUF= 346.200 346.2500 +0.01% -4.35% forint > 0 EURPLN= Polish <EURPLN= 4.3996 4.3965 -0.07% -3.25% zloty > EURRON= Romanian <EURRON= 4.8335 4.8335 +0.00% -0.94% leu > EURHRK= Croatian <EURHRK= 7.4657 7.4683 +0.03% -0.27% kuna > EURRSD= Serbian <EURRSD= 117.510 117.5600 +0.04% +0.05 dinar > 0 % Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2020 .PX Prague 902.55 897.7700 +0.53% -19.10 % .BUX Budapest 34748.0 34407.20 +0.99% -24.60 7 % .WIG20 Warsaw 1832.24 1811.46 +1.15% -14.78 % .BETI Buchares 8511.10 8493.41 +0.21% -14.70 t % .SBITOP Ljubljan <.SBITOP 843.19 850.22 -0.83% -8.93% a > .CRBEX Zagreb 1581.13 1581.13 +0.00% -21.63 % .BELEX1 Belgrade <.BELEX1 657.79 664.62 -1.03% -17.95 5 5> % .SOFIX Sofia 434.55 436.91 -0.54% -23.51 % Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT=R 2-year <CZ2YT=R 0.0640 0.0080 +077bp +1bps R R> s CZ5YT=R 5-year <CZ5YT=R 0.3590 -0.0180 +108bp -2bps R R> s CZ10YT= <CZ10YT= 0.8250 0.0180 +137bp +1bps RR 10-year RR> s Poland PL2YT=R 2-year <PL2YT=R 0.1250 -0.0030 +083bp +0bps R R> s PL5YT=R 5-year <PL5YT=R 0.6580 -0.0060 +138bp -1bps R R> s PL10YT= <PL10YT= 1.2610 0.0020 +180bp -1bps RR 10-year RR> s FORWARD 3×6 6×9 9×12 3M interb ank Czech 0.33 0.33 0.36 0.34 Rep <PRIBOR= > Hungary 0.62 0.60 0.60 0.60 Poland 0.19 0.18 0.17 0.23 Note: are for ask FRA prices quotes ********************************************** **************** (Additional reporting by Alan Charlish in Warsaw and Luiza Ilie in Bucharest)

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