Wires

CEE MARKETS-FX, stocks drop as coronavirus quashes recent gains

PRAGUE, March 6 (Reuters) - Central European stock indices fell as much as 4% and currencies lost up to half a percent on Friday, giving back most of their gains from the week as markets around the world tumbled on the fast-spreading coronavirus epidemic. After the region got a boost earlier in the week from the U.S. Federal Reserve's 50-basis-point rate cut, central European assets dropped on Friday as the number of new coronavirus cases spread in Europe and the United States, heightening fears of a global recession. Serbia and Slovakia reported their first cases of the coronavirus, while Czech Prime Minister Andrej Babis called on Czechs to stay out of Italy - the epicentre of the European outbreak. Italy this week announced the closure of all schools and universities for two weeks, while California declared a state of emergency to limit the spread of the virus, which has infected more than 98,000 people globally and caused over 3,300 deaths. "Risk-off again in the CEE region," a Prague trader said. The Polish zloty was down 0.2% at 4.307 to the euro, staying off a nearly five-month low hit last week. Hungary's forint also stayed clear of an all-time low but was down 0.3% at 337.25. The Czech crown led losses, falling 0.5% to 25.48. Stock markets took the brunt of the hit, with Budapest shedding more than 4% and Warsaw blue-chips down more than 3%. Prague lost 2.25%. The declines were lower than what was reported last week amid coronavirus fears. Hungary's OTP Bank, which had outperformed most banking stocks in recent weeks, lost 6% despite posting a record 2019 profit on Friday. "Loan growth in Hungary was very robust in the beginning of the year but nobody sees past March," Concorde Securities sales trader Norbert Harcsa said, referring to market worries. The Fed action this week, followed by other global central banks, has raised questions of whether policy setters in the region could follow suit even as rising inflation in the region has put pressure on rates to rise. ING said on Friday it saw no imminent chance of the region "joining the chorus" of easing and any moves would likely come later, rather than sooner. A drop in Czech forward rates this week, it said, made the Czech 3x6 FRA attractive for payers. Analysts have also said Hungary was now off the hook for policy tightening despite region-leading price growth.

CEE SNAPSHOT ATMARKETS 1146

CET CURRENCIES

Latest Previou Daily Change

s

bid close change in 2020EURCZK Czech <EURCZK 25.4800 25.3640 -0.46% -0.19%= crown =>EURHUF Hungary <EURHUF 337.2500 336.195 -0.31% -1.81%= forint => 0EURPLN Polish <EURPLN 4.3070 4.2990 -0.19% -1.17%= zloty =>EURRON Romanian <EURRON 4.8110 4.8117 +0.01% -0.47%= leu =>EURHRK Croatian <EURHRK 7.4935 7.4930 -0.01% -0.64%= kuna =>EURRSD Serbian <EURRSD 117.4900 117.590 +0.09% +0.07%= dinar => 0Note: calculated from 1800 CET

daily change

Latest Previou Daily Change

s

close change in 2020.PX Prague 968.41 990.660 -2.25% -13.20%

0

.BUX Budapest 40881.83 42607.9 -4.05% -11.29%

8

.WIG20 Warsaw <.WIG20 1762.38 1822.85 -3.32% -18.03%>.BETI Buchares 9449.64 9594.01 -1.50% -5.29%

t

.SBITO Ljubljan <.SBITO 876.35 904.42 -3.10% -5.35%P a P>.CRBEX Zagreb <.CRBEX 1825.63 1859.66 -1.83% -9.51%>.BELEX Belgrade .BELEX 776.59 788.23 -1.48% -3.13%15 15>.SOFIX Sofia <.SOFIX 533.37 536.40 -0.56% -6.12%>Yield Yield Spread Daily(bid) change vs Bund change

in

Czech spread

Republic

CZ2YT= 2-year <CZ2YT= 1.6870 0.0090 +257bps +4bpsRR RR>CZ5YT= 5-year <CZ5YT= 1.4110 -0.0600 +230bps -3bpsRR RR>CZ10YT <CZ10YT 1.2300 -0.0410 +197bps +2bps=RR 10-year =RR>

Poland

PL2YT= 2-year <PL2YT= 1.2560 -0.0150 +214bps +1bpsRR RR>PL5YT= 5-year <PL5YT= 1.3830 -0.0610 +227bps -3bpsRR RR>PL10YT <PL10YT 1.6440 -0.0610 +238bps +0bps=RR 10-year =RR>

FORWARD

3x6 6x9 9x12 3M

interba nk

Czech <CZKFRA 2.03 1.64 1.36 2.34Rep ><PRIBO

R=>

Hungary <HUFFRA 0.76 0.76 0.78 0.66><BUBOR

=>

Poland <PLNFRA 1.51 1.26 1.14 1.70><WIBOR

=> Note: FRA quotes are for ask prices

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(Reporting by Jason Hovet in Prague and Marton Dunai and Anita Komuves in Budapest; Editing by Sherry Jacob-Phillips)