×

CEE MARKETS-Zloty eases, Polish central bank seen unworried by inflation

* Zloty near 2018 lows ahead of Polish central bank's meeting

* Poland's CPI forecasts are seen showing not much price pressure

* Budapest leads continuing recovery in CEE stock markets

BUDAPEST/WARSAW, March 6 (Reuters) - The zloty eased on Tuesday, trading near this year's weakest levels against the euro ahead of a Polish central bank meeting which is expected to see rates left on hold and new forecasts project moderate inflation. Analysts in a Reuters poll unanimously forecast that the bank will keep interest rates unchanged at its meeting on Wednesday. The central bank will publish its latest mid-term economic forecasts after the meeting. "The latest inflation projection may surprise with its dovish tone, which could exert some pressure on the zloty," BZ WBK analysts said in their daily note. The Polish unit eased 0.1 percent to 4.1937 against the euro, underperforming Central European peers which were either flat or firmed slightly. The euro/dollar cross, often watched in the region's markets, gave no clear guidance, while a continuing rebound of equities after weeks of falling was a positive factor for currencies. Dollar buying often causes selling of currencies in the region. They have been mostly rangebound in the past week as investors wait for clues about global trends from the European Central Bank's upcoming meeting and U.S. economic data. The breakdown of Hungary's fourth-quarter economic output data showed that a surge in household consumption and investments continue to boost growth, even though a pick-up in imports could narrow the country's big trade surplus.

The forint, like the zloty, is close to its weakest levels of the last few months as the Hungarian central bank keeps policy loose, unlike the Czech central bank which started to lift interest rates last year. Poland's central bank is seen as unlikely to raise rates this year, and Hungary may keep them at record lows for years. Regional equities benefited from a rebound in global share markets. Fears of a trade war between the United States and the European Union have eased, but have not passed, keeping investors cautious, analysts said. Technical factors helped some Hungarian stocks after last month's decline caused by worsened global sentiment. Budapest's main index rose 1.2 percent as the four companies which have the highest capitalization on the bourse firmed, including pharmaceuticals Richter, which gained 2.3 percent. Warsaw's bluechip index rose 0.4 percent.

CEE SNAPSHOT AT MARKETS 1008 CET

CURRENCI ES

Latest Previous Daily Change bid close change in 2018 Czech <EURCZK= 25.4100 25.4300 +0.08% +0.52% crown > Hungary <EURHUF= 314.1700 314.1500 -0.01% -1.04% forint > Polish <EURPLN= 4.1937 4.1899 -0.09% -0.41% zloty > Romanian <EURRON= 4.6600 4.6605 +0.01% +0.42% leu > Croatian <EURHRK= 7.4250 7.4335 +0.11% +0.07% kuna > Serbian <EURRSD 117.9600 117.9900 +0.03% +0.46% dinar > Note: calculated from 1800 CET

daily change

Latest Previous Daily Change close change in 2018 Prague 1120.83 1113.160 +0.69% +3.96%

0

Budapest 37580.30 37119.66 +1.24% -4.56% Warsaw 2339.27 2330.10 +0.39% -4.95% Bucharest 8425.15 8384.01 +0.49% +8.66% Ljubljana <.SBITOP 809.70 807.02 +0.33% +0.41% > Zagreb 1852.38 1850.65 +0.09% +0.52% Belgrade <.BELEX1 751.37 751.50 -0.02% -1.11%

5>

Sofia 686.46 683.12 +0.49% +1.33%

BONDS

Yield Yield Spread Daily (bid) change vs Bund change

in

Czech spread

Republic

2-year <CZ2YT=R 0.8630 0.0600 +141bps +7bps

R>

5-year <CZ5YT=R 1.2660 0.0000 +126bps +0bps

R>

10-year <CZ10YT= 1.9370 0.0310 +129bps +2bps

RR> Poland

2-year <PL2YT=R 1.6610 0.0040 +220bps +2bps

R>

5-year <PL5YT=R 2.5790 0.0210 +257bps +2bps

R>

10-year <PL10YT= 3.3290 0.0070 +269bps +0bps

RR>

FORWARD RATE AGREEMEN

T

3x6 6x9 9x12 3M

interban k

Czech Rep 0.97 1.09 1.24 0.91

<PRIBOR=

>

Hungary 0.08 0.11 0.19 0.02 Poland 1.74 1.76 1.84 1.72

Note: FRA are for ask prices quotes

************************************************

*************

(Reporting by Sandor Peto Editing by Catherine Evans)