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CEE MARKETS-Stocks jump on U.S. stimulus, but virus crisis not over

By Anita Komuves

By Anita Komuves BUDAPEST, March 25 (Reuters) - Central European stock markets rose, led by Prague, and regional currencies gained on Wednesday as the United States agreed on $2 trillion economic stimulus bill, lifting market sentiment around the world. The stimulus package includes a large increase in unemployment insurance and hundreds of billions of dollars to aid companies harmed by the coronavirus. "It is too early to open the champagne bottles, the plateau of the pandemic is well ahead of us," CIB bank said in a note. "And we will only be able to assess the damage to the real economy later." Central European governments have also announced a series of emergency measures recently to counter the economic blow from lockdowns, production halts and disruption to business activity and supply chains. The Czech, the Polish and the Romanian central banks have cut their benchmark rates. The National Bank of Hungary left interest rates unchanged on Tuesday, as expected, and announced further steps to boost liquidity. It introduced a new fixed-rate collateralised loan instrument with unlimited liquidity. The first tender of the new instrument will be held later on Wednesday. "This tool will be able to stabilize not only lending, but also the government securities market ... and this is what we have seen today," Deputy Governor Marton Nagy said, referring to a drop in yields, especially at the long end of the yield curve on Tuesday. Five- and 10-year government bond yields dropped in Hungary by more than 50 basis points on Tuesday before the NBH's announcements, anticipating the measures, analysts say. Yields on the 10-year Hungarian bonds were up by 20 basis points on Wednesday, an FI trader in Budapest said. "The market is disappointed because what the NBH announced is not proper QE, contrary to what is happening in neighboring countries," he said. The Hungarian forint gained 0.57% on Wednesday and was trading at 352.50 to the euro after slipping the day before as a reaction to the NBH's measures. Elsewhere, the Czech crown was also up, gaining 0.5% and trading at 27.557 to the euro. The zloty gained 0.66% and was trading at 4.576. The Romanian leu was stable. The Czech Republic holds a bond auction on Wednesday with results due after 1100GMT. "Today's bonds auction will be a first test of where demand currently is," Komercni Banka trader Dalimil Vyskovsky said in a note. "The finance ministry is offering a set of three bonds ... as the issuer seems to be trying to offer investors a wider range of instruments to test where demand will be strongest." Czech bond yields were dipping on Wednesday after a drop yesterday, correcting from a spike in the past few days. Regional stock indexes were up, with Prague's equities jumping more than 7% by 0857 GMT. Budapest and Bucharest were up by 3% and Warsaw's stocks gained nearly 3%. CEE SNAPSHOT AT MARKETS 0957 CET CURRENCIE S Latest Previous Daily Change bid close change in 2020 Czech 27.5570 27.6950 +0.50% -7.71% crown Hungary 352.5000 354.5000 +0.57% -6.06% forint Polish 4.5761 4.6065 +0.66% -6.99% zloty Romanian 4.8390 4.8445 +0.11% -1.05% leu Croatian 7.6090 7.6115 +0.03% -2.15% kuna Serbian 117.4900 117.5450 +0.05% +0.07% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2020 Prague 851.78 794.7400 +7.18% -23.65% Budapest 33758.50 32614.56 +3.51% -26.74% Warsaw 1494.06 1451.02 +2.97% -30.51% Bucharest 7719.84 7472.17 +3.31% -22.63% Ljubljana 739.98 706.27 +4.77% -20.08% Zagreb 1437.84 1403.99 +2.41% -28.73% Belgrade <.BELEX15 623.04 616.31 +1.09% -22.28% > Sofia 432.07 418.88 +3.15% -23.95% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=RR 1.3210 0.0870 +192bps +5bps > 5-year <CZ5YT=RR 1.5120 0.0700 +199bps +4bps > 10-year <CZ10YT=R 1.5530 -0.0010 +185bps -3bps R> Poland 2-year <PL2YT=RR 0.9650 0.0320 +157bps +0bps > 5-year <PL5YT=RR 1.4220 0.0820 +190bps +5bps > 10-year <PL10YT=R 1.9420 0.1450 +224bps +12bps R> FORWARD 3x6 6x9 9x12 3M interban k Czech Rep < 0.69 0.40 0.35 1.76 PRIBOR=> Hungary < 0.45 0.42 0.33 0.55 BUBOR=> Poland < 0.55 0.42 0.44 1.17 WIBOR=> Note: FRA are for ask prices quotes *************************************************** *********** (Additional reporting by Jason Hovet in Prague and Alan Charlish in Warsaw; editing by Larry King)