CEE MARKETS-Zloty eases, Polish CPI below forecast

* Zloty eases; Central European currencies, stocks are mixed

* Polish CPI below forecast, Slovenian inflation retreats

* Analysts expect Czech central bank to hike rates on Thursday

(Recasts with new analyst comments, analyst poll on Czech rates) BUDAPEST, July 31 (Reuters) - The zloty eased on Tuesday after Poland released lower-than-expected inflation figures for July, which underpinned the view that interest rates will not rise any time soon. Central Europe's main currencies still traded near multi-week highs because in the past weeks investors closed some of the selling positions opened since April. They were hit in the second quarter by a sell-off in emerging markets as the dollar rallied, while inflation was picking up in the fast-growing region. In the region's first July 2018 inflation figures released index at 2 percent in July, despite a drop in food prices. But the figure was below analysts' 2.1 percent forecast and well within the Polish central bank's (NBP) 1.5-3.5 percent target range. Slovenia's own data showed a drop in inflation to 2.1 percent in July from 2.3 percent in June. The zloty eased 0.2 percent to 4.2785 against the euro by 1234 GMT. Analysts said the figures were unlikely to lead to a change in the NBP's loose policy stance. It may keep its main rate on hold at 1.5 percent through this year and 2019, some analysts said. "Since our inflation forecasts suggest the headline inflation will fall in ... (the second half of this year) we don't think the central banks position will be challenged by investors," Citi analysts said in a note. The region's recent inflation rise was mainly driven by fuel prices, while core inflation moves slow, Bank of America Merrill Lynch analyst Doan Mai said in a note. "Only in the Czech Rep(ublic) do we see a steadier uptrend in core CPI," she said. Ten of 13 analysts in a Reuters poll projected that the Czech central bank (CNB) could deliver its 5th rate hike since August 2017 at its meeting on Thursday. Analysts have said the CNB would create policy room with the hikes for the case of an economic slowdown. The Czech Finance Ministry lowered its growth forecasts on Tuesday. The crown, after getting a boost from comments from central bankers suggesting a hike, has got stuck around the 25.6 level against the euro, still weaker than the CNB's predictions. Global market jitters have fuelled fears that the crown may weaken through levels which generate stop-loss selling, and global trade tensions have also kept foreigners cautious over the crown, Commerzbank analyst Melanie Fischinger said. "By the end of the year, we expect the koruna (crown) to appreciate, not least due to imminent interest rate hikes," she added. In Hungary, investors continued to close earlier forint selling positions, and the currency tested a psychological line at 320 against the euro. "We do not see (Hungarian) policy rate hikes until 2H 2019, but upside risks to interbank rates are high and dependent on the HUF, which is likely vulnerable to further sell-off if the markets decide to test the NBH again," the Citi note said.



Latest Previous Daily Change bid close change in 2018 Czech <EURCZK= 25.5950 25.5950 +0.00% -0.21% crown > Hungary <EURHUF= 320.7000 321.6000 +0.28% -3.05% forint > Polish <EURPLN= 4.2785 4.2712 -0.17% -2.39% zloty > Romanian <EURRON= 4.6260 4.6250 -0.02% +1.16% leu > Croatian <EURHRK= 7.4025 7.4000 -0.03% +0.38% kuna > Serbian <EURRSD= 117.9000 118.0300 +0.11% +0.51% dinar > Note: calculated from 1800 CET

daily change

Latest Previous Daily Change close change in 2018 Prague 1094.07 1094.880 -0.07% +1.48%


Budapest 35556.18 35931.23 -1.04% -9.70% Warsaw 2317.85 2327.77 -0.43% -5.82% Bucharest 8020.57 8060.24 -0.49% +3.44% Ljubljana <.SBITOP 888.39 886.13 +0.26% +10.17% > Zagreb 1820.70 1836.15 -0.84% -1.20% Belgrade <.BELEX1 738.97 740.67 -0.23% -2.74%


Sofia 632.72 627.71 +0.80% -6.60%


Yield Yield Spread Daily (bid) change vs Bund change


Czech spread


2-year <CZ2YT=R 1.2660 0.0430 +185bps +4bps


5-year <CZ5YT=R 1.7660 0.0930 +194bps +9bps


10-year <CZ10YT= 2.2240 0.0630 +177bps +7bps

RR> Poland

2-year <PL2YT=R 1.6400 0.0000 +222bps -1bps


5-year <PL5YT=R 2.5450 -0.0050 +272bps -1bps


10-year <PL10YT= 3.2110 -0.0010 +276bps +0bps




3x6 6x9 9x12 3M

interban k

Czech Rep 1.44 1.65 1.77 1.22



Hungary 0.34 0.53 0.74 0.17 Poland 1.74 1.77 1.83 1.70

Note: FRA are for ask prices quotes



(Reporting by Sandor Peto Editing by Matthew Mpoke Bigg)