UPDATE 1-CEE MARKETS-Zloty hits 10-week peak, leading FX as sentiment rises

 (Updates zloty move, Hungarian central bank decision)
    PRAGUE, May 26 (Reuters) - Poland's zloty jumped more than
1% on Tuesday after breaking a key level to hit a 10-week high,
while central European stocks gained 2% to 3% as European
economies continued to reopen.
    In Hungary, the central bank kept its key interest rates
unchanged, as expected, and said it would use government bond
purchases sparingly as it began a week of policy meetings in the
region, with Poland and Romania to follow.
    The forint was up 0.5% at 3w48.98 to the euro by
1420 GMT. The zloty rose to its strongest level
against the euro since March 17, up 1.4% on the day at 4.443. 
    The move has helped the Polish currency gain back more than
half its losses since the end of February, after the coronavirus
pandemic hit central European markets and triggered a sell-off
on par with the 2008-09 global financial crisis.
    "It's risk-on mood in the market and some technical levels
were broken," said a Warsaw-based currency dealer, referring to
the psychological 4.50 per euro area. "The market was mainly
long euro against the zloty ... so now I guess those guys are
taking stop losses."
    
    
    
    With economies reeling after being virtually shut down to
contain the virus outbreak, central banks in the region have
reacted largely with easing policy to cushion the fall.
    Hungary's central bank, though, tightened its previously
ultra-dovish policy in April to stabilise the forint. It started
a quantitative easing programme in May to stimulate the economy,
but has reduced how much it buys in tenders.
    The measures have helped steady the forint in a range of
348-355 per euro in May, well off a record low of 369.54 hit on
April 1.
    Elsewhere, Romania's leu was steady and the Czech
crown added 0.4% to 27.110. Warsaw stocks
rose 3.2% and Prague and Budapest were up over 2%.
    A wave of business re-openings has boosted sentiment around
Europe. Czech restaurants opened their indoor dining rooms on
Monday for the first time since mid-March, the latest easing of
restrictions in central Europe this month.
    
                                CEE MARKETS        SNAPSHOT  AT                        
                                                               1620 CET                
                                                                                       
                                CURRENCIES                                             
                                                   Latest    Previous        Daily     Change
                                                   bid       close           change    in 2020
 EURCZK=    Czech crown                            27.1100   27.2225         +0.41%    -6.19%
 EURHUF=    Hungary forint                         348.9800  350.8350        +0.53%    -5.11%
 EURPLN=    Polish zloty                           4.4425    4.5036          +1.37%    -4.19%
 EURRON=    Romanian leu                           4.8435    4.8417          -0.04%    -1.14%
 EURHRK=    Croatian kuna                          7.5870    7.5825          -0.06%    -1.87%
 EURRSD=    Serbian dinar                          117.5800  117.6100        +0.03%    -0.01%
            Note: daily change  calculated from                              1800 CET  
                                                                                       
                                STOCKS                                                 
                                                   Latest    Previous        Daily     Change
                                                             close           change    in 2020
 .PX        Prague                                 900.68    882.0000        +2.12%    -19.27%
 .BUX       Budapest                               36045.27  35210.60        +2.37%    -21.78%
 .WIG20     Warsaw                                 1697.71   1644.74         +3.22%    -21.04%
 .BETI      Bucharest                              8696.97   8688.36         +0.10%    -12.83%
 .SBITOP    Ljubljana                              820.83    812.76          +0.99%    -11.34%
 .CRBEX     Zagreb                                 1611.69   1576.47         +2.23%    -20.11%
 .BELEX15   Belgrade                               669.21    668.97          +0.04%    -16.53%
 .SOFIX     Sofia                                  451.56    450.22          +0.30%    -20.52%
                                                                                       
                                BONDS                                                  
                                                   Yield     Yield           Spread    Daily
                                                   (bid)     change          vs Bund   change in
            Czech Republic                                                             spread
 CZ2YT=RR   2-year                                 0.0960    -0.0430         +074bps   -8bps
 CZ5YT=RR   5-year                                 0.3950    -0.0410         +101bps   -10bps
 CZ10YT=RR  10-year                                0.7820    0.0070          +121bps   -6bps
            Poland                                                                     
 PL2YT=RR   2-year                                 0.5340    -0.0180         +117bps   -6bps
 PL5YT=RR   5-year                                 0.9720    0.0020          +159bps   -5bps
 PL10YT=RR  10-year                                1.4270    0.0060          +185bps   -6bps
                                                                                       
                                FRA                                                    
                                                   3x6       6x9             9x12      3M interbank
            Czech Rep                              0.25      0.26            0.30      0.34
            Hungary                                0.85      0.84            0.80      0.95
            Poland                                 0.40      0.35            0.35      0.68
            Note: FRA quotes are for ask prices                                        
            **************************************************************
                                                                                       
 
    
 (Reporting by Jason Hovet in Prague, Alan Charlish in Warsaw
and Anita Komuves in Budapest; editing by Kirsten Donovan, Larry
King)
  
 
 

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