CEE MARKETS-Central Europe's stocks regain some ground after tariff slide, FX firmer

Reuters
04-08
CEE MARKETS-Central Europe's stocks regain some ground after tariff slide, FX firmer

WARSAW, April 8 (Reuters) - Central European stock markets recouped some losses on Tuesday after their worst three-day slide in years following the global market turmoil caused by U.S. tariffs, while currencies also steadied after falls.

The European Union faces 25% import tariffs on steel and aluminium and cars and broader tariffs of 20% for almost all other goods under U.S. President Donald Trump's policy to hit countries he says impose high barriers to U.S. imports.

The European Commission said on Monday it had offered a "zero-for-zero" tariff deal to avert a trade war as EU ministers agreed to prioritise negotiations.

The prospect of negotiations between the U.S. and trading partners delivered some calm to world markets on Tuesday although the mood was still fragile.

In central Europe, Prague's main index .PX firmed 3%, and Budapest's .BUX and Bucharest's .BETI were up 2%, while Warsaw's .WIG20 grew 1% on Tuesday morning.

They had slumped 6% to 12% since mid last week, shedding most of this year's gains made on the back of hopes for ending the war in Ukraine. The decline for most bourses was the biggest since Russia's invasion of Ukraine in 2022, and in Prague's case, the biggest three-day fall since the COVID pandemic hit in 2020.

The Warsaw Stock Exchange GPW.WA said on Tuesday it could pause trading again "in the event of unusual volatility resulting in the activation of volatility mechanisms", after resorting to such halt for about an hour on Monday.

On currency markets, by 0826 GMT, the Czech crown EURCZK= traded 0.3% higher against the euro at 25.1950, continuing to pull away from a 2-1/2 month low of 25.300 hit on Friday.

The Czech National Bank $(CNB.AU)$ paused its monetary easing campaign for a second time in late-March and highlighted inflation risks, including trade wars that could lead to a rise in prices in the short-term.

Rates markets, though, have fallen in recent days, signalling expectations of rate cuts, although most analysts attributed the move to a fall in global rates markets.

"CZK rates seem to have mostly detached from the Czech National Bank reaction function and some correction in rates in the coming days should keep EUR/CZK below 25.300," ING said.

In Hungary, the central bank is also on hold on rates, and data on Tuesday showed Hungary's headline inflation easing faster than expected to 4.7% on the year in March.

The Hungarian forint EURHUF=, which has traded at its lowest since February this week, edged 0.1% higher to the euro, trading at 407.70 per euro.

"There was a bit of attention on the CPI but it is still the international mood that moves the forint," a Budapest-based trader said.

In Poland, the zloty EURPLN= traded 0.2% lower at 4.2960, near its weakest level since November hit on Monday.

Last week Polish central bank Governor Adam Glapinski said the bank could ease policy, shifting to a dovish stance.

In Romania, the central bank held its main interest rate at 6.50% as expected on Monday, and the leu EURRON= traded flat at 4.9773 per euro on Tuesday.

CEE MARKETS SNAPSHOT AT 1026 CET

CURRENCIES

Latest trade

Previous close

Daily change

Change in 2025

Czech crown

EURCZK=

25.1950

25.2750

+0.32%

+0.06%

Hungary forint

EURHUF=

407.7000

408.0000

+0.07%

+0.91%

Polish zloty

EURPLN=

4.2960

4.2880

-0.19%

-0.45%

Romanian leu

EURRON=

4.9773

4.9779

+0.01%

-0.02%

Serbian dinar

EURRSD=

117.0700

117.1300

+0.05%

-0.10%

Note: daily change calculated from 1800 CET

STOCKS

Latest

Previous close

Daily change

Change in 2025

Prague

.PX

1955.78

1902.5900

+2.80%

+11.11%

Budapest

.BUX

84363.14

82400.87

+2.38%

+6.35%

Warsaw

.WIG20

2448.01

2431.32

+0.69%

+11.68%

Bucharest

.BETI

16846.75

16483.03

+2.21%

+0.75%

BONDS

Yield (bid)

Yield change

Spread vs Bund

Daily change in spread

Czech Rep 2-year

CZ2YT=RR

3.2790

0.0340

+144bps

+1bps

Czech Rep 5-year

CZ5YT=RR

3.6330

0.0320

+151bps

+1bps

Czech Rep 10-year

CZ10YT=RR

4.0490

-0.0250

+146bps

-2bps

Poland 2-year

PL2YT=RR

4.5370

0.0060

+270bps

-2bps

Poland 5-year

PL5YT=RR

4.8950

-0.0400

+278bps

-6bps

Poland 10-year

PL10YT=RR

5.3250

-0.0370

+274bps

-3bps

FORWARD RATE AGREEMENTS

3x6

6x9

9x12

3M interbank

Czech Rep

CZKFRA, PRIBOR=

3.34

3.13

2.95

3.71

Hungary

HUFFRA, BUBOR=

6.94

6.80

6.39

6.50

Poland

PLNFRA, WIBOR=

4.66

4.20

3.89

5.68

Note: FRA quotes are for ask prices

(Reporting by Karol Badohal in Warsaw, Anita Komuves in Budapest and Jason Hovet in Prague; Editing by Shailesh Kuber)

((karl.badohal@thomsonreuters.com;))

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