UPDATE 1-CEE MARKETS-Romania central bank cuts rates, stocks rise on stimulus hopes

 (Updates with surprise rate cut in Romania)
    By Anita Komuves
    BUDAPEST, Aug 5 (Reuters) - Romania's central bank
unexpectedly cut its benchmark interest rate by 25 basis points
to 1.50% on Wednesday and pledged to continue providing
liquidity as the economy reels under the impact of the
coronavirus pandemic.  
    Analysts in a Reuters poll had expected the bank to hold
fire this month. The Romanian central bank has so
far delivered three rate cuts worth 1 percentage point overall
since March.  
    The Romanian leu was flat versus the euro after
the decision.
    Elsewhere, Central European stock indices gained 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 2% and Prague's
rose 1%. Warsaw was up 1.2% while Bucharest
added 0.8%.
    The Czech crown gained 0.36% and was trading at
26.080 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.
    The Hungarian forint gained 0.43% to trade at
344.70 per euro.  
    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 began in early May but was 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 2.76% and 
2.60% 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        1756              
                                       CET               
                              CURRENC                           
                              IES                        
                              Latest   Previou  Daily    Change
                                       s                 
                              bid      close    change   in 2020
 EURCZK=  Czech      <EURCZK  26.0800  26.1730   +0.36%   -2.48%
          crown      =>                                  
 EURHUF=  Hungary    <EURHUF  344.700  346.250   +0.45%   -3.93%
          forint     =>             0        0           
 EURPLN=  Polish     <EURPLN   4.4023   4.3965   -0.13%   -3.31%
          zloty      =>                                  
 EURRON=  Romanian   <EURRON   4.8335   4.8335   +0.00%   -0.94%
          leu        =>                                  
 EURHRK=  Croatian   <EURHRK   7.4658   7.4683   +0.03%   -0.27%
          kuna       =>                                  
 EURRSD=  Serbian    <EURRSD  117.510  117.560   +0.04%   +0.05%
          dinar      =>             0        0           
          Note:      calculated from            1800            
          daily                                 CET      
          change                                         
                                                                
                              Latest   Previou  Daily    Change
                                       s                 
                                       close    change   in 2020
 .PX      Prague               906.41  897.770   +0.96%  -18.75%
                                             0           
 .BUX     Budapest            35103.3  34407.2   +2.02%  -23.83%
                                    9        0           
 .WIG20   Warsaw     <.WIG20  1833.20  1811.46   +1.20%  -14.74%
                     >                                   
 .BETI    Bucharest           8559.45  8493.41   +0.78%  -14.21%
 .SBITOP  Ljubljana  <.SBITO   842.54   850.22   -0.90%   -9.00%
                     P>                                  
 .CRBEX   Zagreb     <.CRBEX  1581.13  1581.13   +0.00%  -21.63%
                     >                                   
 .BELEX1  Belgrade   <.BELEX   666.75   664.62   +0.32%  -16.83%
 5                   15>                                 
 .SOFIX   Sofia      <.SOFIX   434.56   436.91   -0.54%  -23.51%
                     >                                   
                                                                
                              Yield    Yield    Spread   Daily
                              (bid)    change   vs Bund  change
                                                         in
          Czech                                          spread
          Republic                                       
 CZ2YT=R    2-year   <CZ2YT=   0.0640   0.0080   +076bp    +1bps
 R                   RR>                              s  
 CZ5YT=R    5-year   <CZ5YT=   0.3570  -0.0200   +105bp    -2bps
 R                   RR>                              s  
 CZ10YT=    10-year  <CZ10YT   0.8140   0.0070   +132bp    +1bps
 RR                  =RR>                             s  
          Poland                                                
 PL2YT=R    2-year   <PL2YT=   0.1340   0.0060   +083bp    +1bps
 R                   RR>                              s  
 PL5YT=R    5-year   <PL5YT=   0.7020   0.0160   +140bp    +2bps
 R                   RR>                              s  
 PL10YT=    10-year  <PL10YT   1.2990   0.0000   +181bp    +0bps
 RR                  =RR>                             s  
                     FORWARD                                    
                              3x6      6x9      9x12     3M
                                                         interba
                                                         nk
          Czech Rep  <CZKFRA     0.33     0.33     0.35     0.34
                     ><PRIBO                             
                     R=>                                 
          Hungary    <HUFFRA     0.62     0.60     0.60     0.60
                     ><BUBOR                             
                     =>                                  
          Poland     <PLNFRA     0.17     0.17     0.17     0.23
                     ><WIBOR                             
                     =>                                  
          Note: FRA  are for ask                                
          quotes     prices                              
          *********************************************         
          *****************                              
 

 (Additional reporting by Alan Charlish in Warsaw and Luiza Ilie
in Bucharest; Editing by Kirsten Donovan)
  
 
 

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