(Updates with stock losses, Czech bond auction)
By Anita Komuves and Jason Hovet
BUDAPEST/PRAGUE, March 11 (Reuters) - Warsaw's blue-chip
index slumped on Wednesday to its lowest since April 2009 as
central European stocks slipped further amid deepening worries
over the coronavirus outbreak, while investors also pushed into
Czech bonds.
The region's currencies were a mixed bag, with the Czech
crown losing half a percent, staying under pressure as
markets weigh whether the central bank could reverse its recent
interest rate tightening as the economy comes under strain.
Czech National Bank Governor Jiri Rusnok reiterated the bank
was ready to cut if needed, but now was not yet the time.
Markets have priced in a steep five-plus rate cuts over the
next year, which analysts have called too aggressive.
At a planned state bond auction, the Czech Finance Ministry
sold twice as much as originally planned, boosting its offer for
new bonds due 2031 as yields have come down sharply in the last
month.
"Demand was strong again," a dealer said.
On the equity front, Warsaw dropped 5.87%, continuing a
slide to bring its 2020 losses to 30%, amid growing nervousness
about the impact that the new virus, which has infected more and
more people around Europe, will have.
The Bank of England cut rates by 50 bps on Wednesday and the
region's players are looking to Thursday's meeting of the
European Central Bank, expecting measures to ease the economic
fallout from the coronavirus outbreak.
Regional central bank officials have said they were
assessing the economic damage caused by the virus but have sent
mixed messages about the need for rate cuts.
In Poland, two rate-setters said this week that it was time
to consider a rate cut, while a third called for a wait-and-see
strategy before changing rates.
Recent "commentary by some central banks from the region
highlighted the stark divergence between central bankers' views
of rate stability and the market's implied easing, which now
expects a cut from most countries in the region at their next
meeting," Morgan Stanley wrote in a note.
The Polish zloty inched up 0.05% on Wednesday and
Hungary's forint lost less than 0.1%.
CEE SNAPSHOT AT
MARKETS 1729
CET
CURRENCI
ES
Latest Previou Daily Change
s
bid close change in 2020
EURCZK Czech <EURCZK 25.7450 25.6175 -0.50% -1.22%
= crown =>
EURHUF Hungary <EURHUF 336.0500 335.790 -0.08% -1.46%
= forint => 0
EURPLN Polish <EURPLN 4.3166 4.3186 +0.05% -1.39%
= zloty =>
EURRON Romanian <EURRON 4.8189 4.8215 +0.05% -0.63%
= leu =>
EURHRK Croatian <EURHRK 7.5750 7.5455 -0.39% -1.71%
= kuna =>
EURRSD Serbian <EURRSD 117.6100 117.600 -0.01% -0.03%
= dinar => 0
Note: calculated from 1800
daily CET
change
Latest Previou Daily Change
s
close change in 2020
.PX Prague 885.10 912.760 -3.03% -20.66%
0
.BUX Budapest 36536.24 38380.6 -4.81% -20.72%
0
.WIG20 Warsaw <.WIG20 1505.64 1599.48 -5.87% -29.97%
>
.BETI Buchares 8381.47 8722.11 -3.91% -15.99%
t
.SBITO Ljubljan <.SBITO 827.84 843.94 -1.91% -10.59%
P a P>
.CRBEX Zagreb <.CRBEX 1591.42 1665.47 -4.45% -21.12%
>
.BELEX Belgrade <.BELEX 752.28 757.33 -0.67% -6.16%
15 15>
.SOFIX Sofia <.SOFIX 495.12 494.81 +0.06% -12.85%
>
Yield Yield Spread Daily
(bid) change vs Bund change
in
Czech spread
Republic
CZ2YT= 2-year <CZ2YT= 1.7660 -0.0810 +272bp -8bps
RR RR> s
CZ5YT= 5-year <CZ5YT= 1.1450 -0.1040 +206bp -13bps
RR RR> s
CZ10YT <CZ10YT 1.1320 -0.0120 +188bp -6bps
=RR 10-year =RR> s
Poland
PL2YT= 2-year <PL2YT= 1.2330 0.0560 +219bp +6bps
RR RR> s
PL5YT= 5-year <PL5YT= 1.4830 0.1450 +240bp +12bps
RR RR> s
PL10YT <PL10YT 1.7130 0.1700 +246bp +12bps
=RR 10-year =RR> s
FORWARD
3x6 6x9 9x12 3M
interba
nk
Czech <CZKFRA 1.82 1.39 1.08 2.34
Rep ><PRIBO
R=>
Hungary <HUFFRA 0.64 0.58 0.55 0.67
><BUBOR
=>
Poland <PLNFRA 1.42 1.15 1.03 1.69
><WIBOR
=>
Note: FRA quotes are for
ask prices
*********************************************
*****************
(Additional reporting by Jason Hovet in Prague; Editing by
Sherry Jacob-Phillips, William Maclean)
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