CEE MARKETS-Currencies, stocks resume losses as coronavirus fears worsen, recession in sight

By Anita Komuves BUDAPEST, March 23 (Reuters) - Central European stocks fell and most currencies eased as a steep jump in new coronavirus cases in the United States and a further drop in oil prices unnerved investors around the world. Western European and Asian indexes gave up their gains from previous days and U.S. equity markets were expected to open with losses on Monday. Market sentiment was also dampened by the failure of the U.S. Senate to approve a proposed $2 trillion economic stimulus plan on Sunday. "Until there is convincing good news about the virus (the number of cases stops rising), markets will not be able to turn substantively positive," CIB Bank analysts said in a note in Budapest. The coronavirus has infected more than 337,500 people worldwide and more than 14,500 have died, according to a Reuters tally. In line with central banks and governments around the world, central European policymakers have announced a series of emergency steps in the past weeks to ease the economic effects of the coronavirus. The Romanian, the Czech and Polish central banks have delivered rate cuts and Hungary's central bank on Thursday gave details of more help to banks, after a blanket moratorium on all household and business loans imposed by the government until the end of this year. Most regional currencies hit new record lows last week before firming on Friday. They gave up those gains on Monday, with the Polish zloty dropping 1% and trading at 4.5626 to the euro. The Hungarian forint was down 0.7% and was trading at 353.40 vs the euro. The Czech crown and the Romanian leu were stable. Romania's central bank was the latest to announce a rate cut. It curt its benchmark interest rate by 50 basis points to 2.0% at a surprise meeting on Friday and narrowed the corridor between its lending and deposit facilities. The bank flagged further easing down the road and said it will provide liquidity to banks via repo transactions and purchase leu-denominated debt on the secondary market. Romanian bank BCR said the measures would be a "large multiplier for the economy, could lead to up to a cumulated 1 ppt higher GDP growth profile over the next couple of years." Romanian debt managers tender 700 million lei worth of August 2022 treasury bonds later on Monday. The finance ministry has failed to sell debt at its last four tenders. The National Bank of Hungary holds its next rate-setting meeting on Tuesday. The NBH is expected to leave key rates unchanged, according to a Reuters poll, although some analysts have pencilled in small rate cuts. Others say the bank could launch quantitative easing to dampen the economic fallout of the coronavirus. "I think the NBH will not touch anything tomorrow, which is a smart decision," a trader in Budapest said. "But they could say a few things to try and cool the market, such as reassuring investors that liquidity will be all right," he added. The NBH will hold its usual swap tender later on Monday. Poland's central bank will conduct another tender to buy treasury bonds worth up to 10 billion zloty on Monday, the central bank said on Friday. Regional stock markets plunged on Monday. Bucharest's index led losses by dropping more than 5% by 0847 GMT. Warsaw fell 3.4% while Prague's and Budapest's equities were down more than 2%. All of the above indexes fell more than 30% this year. CEE SNAPSHOT AT MARKETS 0947 CET CURRENCIE S Latest Previous Daily Change bid close change in 2020 Czech 27.3500 27.3450 -0.02% -7.01% crown Hungary 353.4000 351.0000 -0.68% -6.30% forint Polish 4.5626 4.5178 -0.98% -6.71% zloty Romanian 4.8505 4.8520 +0.03% -1.28% leu Croatian 7.6050 7.6073 +0.03% -2.10% kuna Serbian 117.4800 117.5500 +0.06% +0.08% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2020 Prague 720.24 738.8000 -2.51% -35.44% Budapest 30169.68 30959.94 -2.55% -34.53% Warsaw 1437.29 1488.42 -3.44% -33.15% Bucharest 6975.43 7347.75 -5.07% -30.09% Ljubljana 688.75 714.27 -3.57% -25.61% Zagreb 1325.61 1407.45 -5.81% -34.29% Belgrade <.BELEX15 630.12 630.12 +0.00% -21.40% > Sofia 405.89 413.03 -1.73% -28.56% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 1.4010 -0.0170 +208bps -2bps > 5-year <CZ5YT=RR 1.6010 0.0620 +214bps +7bps > 10-year <CZ10YT=R 1.7350 0.0000 +210bps +3bps R> Poland 2-year <PL2YT=RR 1.3290 0.0670 +201bps +6bps > 5-year <PL5YT=RR 1.5590 -0.0060 +210bps +1bps > 10-year <PL10YT=R 1.9990 0.0000 +237bps +3bps R> FORWARD 3x6 6x9 9x12 3M interban k Czech Rep < 0.78 0.40 0.35 1.78 PRIBOR=> Hungary < 0.48 0.45 0.43 0.59 BUBOR=> Poland < 0.67 0.58 0.58 1.18 WIBOR=> Note: FRA are for ask prices quotes *************************************************** *********** (Additional reporting by Luiza Ilie in Bucharest and Alan Charlish in Warsaw, Editing by Timothy Hertage)