CEE MARKETS-Coronavirus fears weigh on stocks, forint regains some ground

    By Anita Komuves
    BUDAPEST, Feb 21 (Reuters) - Central European stock indexes
slipped on Friday as new cases of coronavirus infections in
China and a strengthening U.S. dollar hit sentiment.  
    Currencies in the region were mostly steady. 
    The forint, however, regained some ground and
interbank rates have stabilized after a sharp rise earlier this
    The forint was trading at 337.48 to the euro at 1022 GMT, up
0.2% while the Czech crown gained 0.15% and the Polish
zloty was up by 0.1%. 
    The Hungarian currency has been on a rollercoaster this
week: it strengthened to 334 to the euro on Wednesday but eroded
those gains quickly after the central bank indicated to local
banks it was uneasy with the pace of increases in interbank
rates, two market sources told Reuters.
    "Bubor rates are slowly coming down from their previous
highs. There had been a few banks whose quotes were extremely
high in the past few days, but they have also returned to the
average," a dealer in Budapest said.
    "It seems that the words of the central bank set things
straight in people's minds." 
    A Reuters poll of analysts showed that Hungary's central
bank is expected to leave interest rates unchanged when it meets
next Tuesday. Investors will be watching its comments about
inflation which at 4.7% ran above expectations in January.

    Central banks in the region are reacting to
higher-than-expected inflation data. While the Czech central
bank reacted with a surprise rate hike on Feb. 6, the Hungarian
and Polish central banks have said they are willing to act if
    Polish central bank head Adam Glapinski doesn't see the need
to raise interest rates now despite higher inflation, but the
bank would be ready to act if the price threat persisted in the
long term, he said in an article in Rzeczpospolita daily on
    Poland's central bank targets inflation of 2.5% plus or
minus one percentage point. January CPI came in at 4.4%
year-on-year. Poland's benchmark interest rate has remained at a
historic low of 1.5% since 2015.
    Regional stock market indexes fell or moved sideways, in
tandem with the main European indexes which fell in the morning
on renewed fears about the economic impact of the coronavirus
after China reported an uptick in the number of cases. 
    The only outlier was Budapest where shares were up
    "There is a global trend of turning away from emerging
markets because of the coronavirus fears. Markets are expecting
the effects to be worse in Europe than in the United States," a
dealer in Budapest said. 
   Hungarian energy company MOL was up 2.7% after it
reported higher-than-expected EBITDA for the fourth quarter and
raised its guidance for this year.  
                   CEE      SNAPSHO   AT                      
                   MARKETS  T        1122              
                            Latest   Previou  Daily    Change
                            bid      close    change   in 2020
 EURCZK  Czech     <EURCZK  25.0500  25.0880   +0.15%   +1.52%
 =       crown     =>                                  
 EURHUF  Hungary   <EURHUF  337.480  338.170   +0.20%   -1.88%
 =       forint    =>             0        0           
 EURPLN  Polish    <EURPLN   4.2775   4.2818   +0.10%   -0.49%
 =       zloty     =>                                  
 EURRON  Romanian  <EURRON   4.8022   4.7930   -0.19%   -0.29%
 =       leu       =>                                  
 EURHRK  Croatian  <EURHRK   7.4450   7.4493   +0.06%   +0.01%
 =       kuna      =>                                  
 EURRSD  Serbian   <EURRSD  117.530  117.560   +0.03%   +0.03%
 =       dinar     =>             0        0           
         Note:     calculated from            1800            
         daily                                CET      
                            Latest   Previou  Daily    Change
                                     close    change   in 2020
 .PX     Prague             1091.68  1097.16   -0.50%   -2.15%
 .BUX    Budapest           46017.1  45792.0   +0.49%   -0.14%
                                  1        7           
 .WIG20  Warsaw    <.WIG20  2097.94  2099.88   -0.09%   -2.43%
 .BETI   Buchares           10157.1  10144.1   +0.13%   +1.80%
         t                        4        6           
 .SBITO  Ljubljan  <.SBITO   982.02   981.75   +0.03%   +6.07%
 P       a         P>                                  
 .CRBEX  Zagreb    <.CRBEX  2022.50  2020.95   +0.08%   +0.25%
 .BELEX  Belgrade  <.BELEX   808.28   808.28   +0.00%   +0.82%
 15                15>                                 
 .SOFIX  Sofia     <.SOFIX   551.31   548.03   +0.60%   -2.96%
                            Yield    Yield    Spread   Daily
                            (bid)    change   vs Bund  change
         Czech                                         spread
 CZ2YT=    2-year  <CZ2YT=   2.0920   0.2850   +273bp   +29bps
 RR                RR>                              s  
 CZ5YT=    5-year  <CZ5YT=   1.5770  -0.1050   +219bp   -12bps
 RR                RR>                              s  
 CZ10YT            <CZ10YT   1.5670   0.0000   +201bp    +0bps
 =RR     10-year   =RR>                             s  
 PL2YT=    2-year  <PL2YT=   1.5620  -0.0050   +220bp    +0bps
 RR                RR>                              s  
 PL5YT=    5-year  <PL5YT=   1.7550  -0.0240   +237bp    -4bps
 RR                RR>                              s  
 PL10YT            <PL10YT   2.0840  -0.0320   +253bp    -3bps
 =RR     10-year   =RR>                             s  
                            3x6      6x9      9x12     3M
         Czech     <CZKFRA     2.39     2.32     2.26     2.39
         Rep       ><PRIBO                             
         Hungary   <HUFFRA     0.76     0.90     1.02     0.60
         Poland    <PLNFRA     1.73     1.72     1.73     1.71
         Note:     are for ask                                
         FRA       prices                              

 (Reporting by Anita Komuves, additional reporting by Agnieszka
Barteczko, editing by Susan Fenton)

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