CEE MARKETS-Assets retreat, Poland seen cutting inflation forecasts

* FX, stocks rally fizzles out as U.S. trade war fear returns

* Polish central bank seen lowering inflation forecasts

BUDAPEST, March 7 (Reuters) - Most Central European currencies and stocks retreated from the previous session's highs on Wednesday on expectations that the Polish central bank (NBP) would revise down its inflation forecasts at a meeting later in the day. Regional currencies and stock indices had risen on Tuesday as risk appetite returned to global markets after weeks of decline caused by fears that inflation may rise globally. But by Wednesday shadows gathered again over equities and emerging markets when a White House advocate for free trade resigned, re-igniting concerns of a possible trade war. Warsaw's bluechip stock index fell 0.7 percent even though good fourth-quarter earnings results boosted the stocks of refiner Lotos by 1 percent. The zloty, the crown and the forint eased mildly against the euro. The region's main currencies were off Tuesday's highs. The leu was slightly firmer from Tuesday's close after Romania reported a 6.9 percent surge in economic output in the last quarter of 2017 compared to a year earlier. At 4.6607 versus the euro, the leu remained near the record lows reached in December over fears of economic overheating. Romanian consumption surged by 9.3 percent in the fourth quarter. A catch-up process in wages across the region with richer Western Europe is a key driver of growth. This has triggered inflation concerns in Romania and also in the Czech Republic, where the central bank started to reverse earlier interest rate cuts last year. But Polish inflation has retreated in the past months. The central bank is expected to cut its inflation forecasts on Wednesday, after lifting them in November. Governor Adam Glapinski has previously said he saw no reason to hike rates at least until the first quarter of 2019, and analysts believe he may reiterate this message on Wednesday. The prospect of the inflation forecast being revised lower keeps a lid on the zloty, they said. "The outcome of the MPC (Monetary Policy Council) meeting should not have much impact on the long end of the Polish IRS and bond curves that are likely to be driven by trends on the core market," BZ WBK analysts said in a note. Elsewhere, Budapest's main equities index bucked the regional fall, rising by 0.4 percent, driven by an almost 3 percent surge in oil group MOL shares which continued to recover from seven-month lows hit on Friday. A Reuters poll published on Wednesday showed that analysts expect the Czech crown and the forint to firm more than 2 percent against the euro in the coming year. 1/8nL5N1QO4PM 1/8



Latest Previous Daily Change bid close change in 2018 Czech <EURCZK= 25.4020 25.4000 -0.01% +0.55% crown > Hungary <EURHUF= 312.8500 312.7200 -0.04% -0.62% forint > Polish <EURPLN= 4.1882 4.1875 -0.02% -0.28% zloty > Romanian <EURRON= 4.6607 4.6640 +0.07% +0.41% leu > Croatian <EURHRK= 7.4260 7.4275 +0.02% +0.06% kuna > Serbian <EURRSD= 117.9500 118.0600 +0.09% +0.47% dinar > Note: calculated from 1800 CET

daily change

Latest Previous Daily Change close change in 2018 Prague 1115.93 1120.960 -0.45% +3.50%


Budapest 38145.88 38008.47 +0.36% -3.13% Warsaw 2322.77 2339.51 -0.72% -5.62% Bucharest 8422.40 8432.84 -0.12% +8.62% Ljubljana <.SBITOP 807.96 810.46 -0.31% +0.20% > Zagreb 1849.08 1846.35 +0.15% +0.34% Belgrade <.BELEX1 747.30 748.01 -0.09% -1.65%


Sofia 685.54 681.67 +0.57% +1.19%


Yield Yield Spread Daily (bid) change vs Bund change


Czech spread


2-year <CZ2YT=R 0.8960 0.0340 +144bps +4bps


5-year <CZ5YT=R 1.3060 0.0400 +126bps +4bps


10-year <CZ10YT= 1.9680 0.0140 +129bps +1bps

RR> Poland

2-year <PL2YT=R 1.6250 -0.0070 +217bps +0bps


5-year <PL5YT=R 2.5750 -0.0010 +253bps +0bps


10-year <PL10YT= 3.3290 0.0000 +265bps +0bps




3x6 6x9 9x12 3M

interban k

Czech Rep 0.97 1.09 1.24 0.91



Hungary 0.07 0.10 0.18 0.02 Poland 1.74 1.77 1.84 1.72

Note: FRA are for ask prices quotes



(Additional reporting by Marcin Goclowski in Warsaw Editing by Raissa Kasolowsky)