CEE MARKETS-Romanian CPI surge hits leu, PM speech watched in Warsaw

* Romania's annual inflation highest in more than 4 years

* Leu eases on concern that central bank falls behind the curve

* Polish PM designate speech may be moderately positive to markets

BUDAPEST/BUCHAREST, Dec 12 (Reuters) - The leu fell on Tuesday after Romania reported a surge in inflation while investors in Poland waited to see how a policy speech by prime minister designate Mateusz Morawiecki later in the day would affect the zloty. Romania's November annual inflation jumped to its highest in more than four years to 3.2 percent from 2.6 percent from October, exceeding analyst forecasts. The inflation rate has risen two percentage points in just three months and almost seven percentage points since May 2016, making it the fastest rising inflation rate in Central Europe. The leu eased 0.1 percent to 4.6365 against the euro by 0941 GMT. The Romanian central bank (NBR) has tightened policy via various tools in recent months, but it has not lifted its interest rates from record lows even though a surge in debt yields has prompted the government to reject bids at several debt auctions since October. The bank is unlikely to change rates at its next meeting on Jan. 8, but could hike them on Feb. 7 when it presents its updated inflation forecasts, ING's chief economist in Romania, Ciprian Dascalu said. "If the central bank is perceived to fall behind the curve we will have an outflow from government bonds by offshore (investors), and as a result a deterioration of the capital account..." he said, pointing to Romania's widening current account gap. A surge in wages has pushed up prices across the region but the latest inflation figures from Budapest, Prague and Warsaw released on Monday did not show enough of a rise to bolster central bank hawks and led to a weakening of the region's main currencies. These regained some ground on Tuesday. The zloty traded a tad firmer, at 4.2049 against the euro. Investors will watch Prime Minister designate Mateusz Morawiecki' policy speech in parliament later on Tuesday. Morawiecki replaces Beata Szydlo, and his appointment and that of other new ministers may cause friction within the ruling PiS party in which Szydlo is more popular, analysts have said. It may however ease tensions between Poland and the European Commission, which has accused Warsaw with undermining the rule of law and has clashed with Szydlo on a number of occasions. The speech may improve sentiment in Polish markets if Morawiecki addresses improved tax collection and the functioning of institutions, said Pekao SA analyst, Arkadiusz Urbanski. "We can expect a reference to a more economy-focused policy, since that was how politicians justified changing the PM, and every optimistic word should support the zloty," he said. However, Wednesday's Federal Reserve meeting was likely to have a bigger market influence, Urbanski said.



Latest Previo Daily Change


bid close change in


Czech crown 25.625 25.636 +0.04 5.39% 0 0 % Hungary 314.07 314.66 +0.19 -1.67% forint 00 00 % Polish zloty 4.2049 4.2063 +0.03 4.73%


Romanian leu 4.6365 4.6326 -0.08% -2.19% Croatian 7.5420 7.5410 -0.01% 0.17%


Serbian 119.47 119.48 +0.01 3.25% dinar 00 00 % Note: daily calculated previo close 1800 change from us at CET


Latest Previo Daily Change


close change in


Prague 1057.1 1058.0 -0.09% +14.7 3 8 0% Budapest 37913. 37575. +0.90 +18.4 70 75 % 7% Warsaw 2388.2 2386.9 +0.05 +22.6 0 3 % 0% Bucharest 7589.3 7614.5 -0.33% +7.12 3 1 % Ljubljana 778.94 775.79 +0.41 +8.55 % % Zagreb 1853.8 1854.4 -0.03% -7.07% 3 5 Belgrade 746.24 744.46 +0.24 +4.02 % % Sofia 667.60 665.47 +0.32 +13.8 % 4%


Yield Yield Spread Daily (bid) change vs change Bund in Czech spread


2-year -0.033 0 +070b +0bps


5-year 0.793 -0.019 +114b -3bps


10-year 1.415 -0.008 +111b -2bps

ps Poland

2-year 1.645 -0.023 +238b -2bps


5-year 2.619 -0.001 +297b -1bps


10-year 3.223 0.001 +292b -1bps



interb ank

Czech Rep <PR 1 1.19 1.32 0


Hungary <BU 0.03 0.06 0.1 0.03


Poland <WI 1.761 1.83 1.904 1.72


Note: FRA are for ask quotes prices ********************************************************* ****

(Additional reporting by Bartosz Chmielewski in Warsaw; Editing