CEE MARKETS-Forint leads FX rise as Hungary central bank readies more firepower

    By Jason Hovet and Anita Komuves
    PRAGUE/BUDAPEST, April 7 (Reuters) - The forint led a jump
in central Europe's currencies on Tuesday as investor hopes that
the corovavirus spread could start to level out boosted riskier
assets while Hungary's markets awaited further central bank
measures to manage the outbreak.
    Hungary's central bank said it would hold an online news
conference at 1200 GMT on Tuesday, with analysts saying it could
unveil new measures to kickstart the economy. 
    Hungary will raise its budget deficit to 2.7% of gross
domestic product this year from a targeted 1%, Prime Minister
Viktor Orban said on Monday. The stimulus package, which
includes subsidised loans to Hungarian companies and funds to
preserve jobs, would amount to 18%-20% of GDP, including central
bank programmes.
    "We can expect an important announcement on the battlefield
of economic defence," Erste analysts said in a note. 
    "We expect a 'pandemic Funding for Growth Scheme' that would
belong to the 2 trillion loan guarantee program. The question is
whether there is anything else in the package."
    The forint had risen by 1% to 360.16 to the euro
by 0856 GMT, pulling further away from a record low of 369.54
hit on April 1.
    The currency has been one of the hardest hit in central
Europe by investor flight, even before the coronavirus outbreak
hit the region in force in March. However, a Reuters poll last
week forecast a steady rebound starting in the region.
    The Czech crown has also sunk to multi-year lows
in the past month and was up 0.9% at 27.294 to the euro on
Tuesday. Poland's zloty added 0.6%. Both are down over
6% in 2020 so far and the forint has lost 8%.
    Stock markets also gained on Tuesday as tapering of the
coronavirus toll in certain European and U.S. hotspots boosted
risk appetite. Warsaw rose 3.7% and Budapest 3%.
    Analysts, though, remain cautious as data will only start to
show the outbreak's impact on central Europe's export-driven
economies that have faced factory shutdowns in recent weeks.
    Manufacturing surveys last week dropped to levels last seen
in the 2008-2009 global financial crisis.
    On bond markets, Czech yields were mixed after the finance
ministry added bond auctions this week to its monthly plan as it
ramps up borrowing.
    Dealers have said demand remains solid for Czech paper,
helped by expectations of the central bank further cutting
interest rates after a reduction of 125 basis points last month.

                   CEE      SNAPSHO   AT                      
                   MARKETS  T        1056              
                            Latest   Previou  Daily    Change
                            bid      close    change   in 2020
 EURCZK  Czech     <EURCZK  27.2940  27.5500   +0.94%   -6.82%
 =       crown     =>                                  
 EURHUF  Hungary   <EURHUF  360.160  363.780   +1.01%   -8.06%
 =       forint    =>             0        0           
 EURPLN  Polish    <EURPLN   4.5361   4.5626   +0.58%   -6.17%
 =       zloty     =>                                  
 EURRON  Romanian  <EURRON   4.8300   4.8295   -0.01%   -0.86%
 =       leu       =>                                  
 EURHRK  Croatian  <EURHRK   7.6295   7.6265   -0.04%   -2.41%
 =       kuna      =>                                  
 EURRSD  Serbian   <EURRSD  117.470  117.600   +0.11%   +0.09%
 =       dinar     =>             0        0           
         Note:     calculated from            1800            
         daily                                CET      
                            Latest   Previou  Daily    Change
                                     close    change   in 2020
 .PX     Prague              827.98  807.950   +2.48%  -25.78%
 .BUX    Budapest           33832.5  32858.7   +2.96%  -26.58%
                                  5        5           
 .WIG20  Warsaw    <.WIG20  1639.04  1581.05   +3.67%  -23.77%
 .BETI   Buchares           8081.59  7706.49   +4.87%  -19.00%
 .SBITO  Ljubljan  <.SBITO   767.84   735.66   +4.37%  -17.07%
 P       a         P>                                  
 .CRBEX  Zagreb    <.CRBEX  1652.74  1581.19   +4.53%  -18.08%
 .BELEX  Belgrade  <.BELEX   671.96   664.25   +1.16%  -16.18%
 15                15>                                 
 .SOFIX  Sofia     <.SOFIX   432.31   427.78   +1.06%  -23.91%
                            Yield    Yield    Spread   Daily
                            (bid)    change   vs Bund  change
         Czech                                         spread
 CZ2YT=    2-year  <CZ2YT=   1.0070   0.0540   +165bp    +4bps
 RR                RR>                              s  
 CZ5YT=    5-year  <CZ5YT=   1.1740  -0.0210   +175bp    -6bps
 RR                RR>                              s  
 CZ10YT            <CZ10YT   1.5260   0.0950   +190bp    +3bps
 =RR     10-year   =RR>                             s  
 PL2YT=    2-year  <PL2YT=   0.9880  -0.0910   +163bp   -11bps
 RR                RR>                              s  
 PL5YT=    5-year  <PL5YT=   1.2890  -0.0030   +187bp    -4bps
 RR                RR>                              s  
 PL10YT            <PL10YT   1.6250  -0.0340   +200bp   -10bps
 =RR     10-year   =RR>                             s  
                            3x6      6x9      9x12     3M
         Czech     <CZKFRA     0.36     0.38     0.45     1.01
         Rep       ><PRIBO                             
         Hungary   <HUFFRA     1.13     1.08     1.15     0.93
         Poland    <PLNFRA     0.56     0.44     0.40     1.17
         Note: FRA quotes are for                             
         ask prices                                    

 (Reporting by Jason Hovet in Prague and Anita Komuves in
Budapest; editing by Nick Macfie)

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