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CEE MARKETS-Hungarian growth gives forint only minor uplift

Sandor Peto

* CEE growth slows despite Hungarian strength

* Hungarian growth at fastest for 15 years

* Stronger dollar keeps lid on CEE assets

* Romanian stocks give up early gains

BUDAPEST, Feb 14 (Reuters) - The forint and the Czech crown firmed slightly on Thursday amid some expectations for monetary policy tightening while a pick-up in Hungary's economic growth bucked Central Europe's slowdown. Czech and Hungarian inflation figures released earlier surprised on the upside, adding arguments to expectations that the Hungarian central bank will start monetary tightening soon and its Czech counterpart will continue its own tightening. The crown and forint firmed a touch against the euro by 0940 GMT, while the Romanian leu and Polish zloty eased slightly. The dollar's firming to a three-month high against the euro kept a lid on Central European asset prices, which are vulnerable to a decline in risk appetite often reflected in dollar buying. Fourth-quarter economic output data from Poland, Romania and Slovakia showed slower but still robust annual growth that is outpacing euro zone economies. Poland led the trio with a 4.9 percent expansion. Hungary's growth is even faster, picking up to 5 percent, its strongest since 2004, when the region's states joined the European Union. The economy has become much more balanced since then, with the budget deficit and state debt declining and the country posting current account surpluses.

RATINGS EXPECTATIONS Finance minister Gabor Gion cooled expectations for a rating upgrade from Standard & Poor's late on Wednesday, saying after meeting representatives of ratings agencies that Hungary would cut its debt slower than agencies have called for. The forint firmed moderately after the GDP figures but, peaking at 318.52 against the euro, stayed closer to the weak end of the past four weeks' 315-320 range. "The market is beginning to understand that the central bank will not rush into tightening. It is a slow process," one Budapest currency dealer said. The bank will need to balance its policy between growing domestic inflation worries and a less hawkish stance from the U.S. Federal Reserve and European Central Bank, one fixed-income trader said. Regional equities moved little as investors kept an eye on U.S.-China trade talks. Bucharest stocks gave up most of the ground gained early in the session after senate speaker Calin Tariceanu said on Wednesday that the government could scrap a 2 percent tax on energy companies' turnover. This year's tax increases, including a tax on bank assets to finance wage rises and other spending, have been widely criticised by industry and the central bank. Romania's economic output data showed a slowdown in annual growth to 4.1 percent in the fourth quarter from 4.4 in the third quarter, underpinning worries that the draft 2019 budget was based on overly optimistic revenue assumptions.



Latest Previous Daily Changebid close change in 2019Czech <EURCZK= 25.7760 25.7940 +0.07% -0.27%crown >Hungary <EURHUF= 318.8000 319.0700 +0.08% +0.72%forint >Polish <EURPLN= 4.3385 4.3366 -0.04% -1.13%zloty >Romanian <EURRON= 4.7440 4.7421 -0.04% -1.90%leu >Croatian <EURHRK= 7.4060 7.4060 +0.00% +0.05%kuna >Serbian <EURRSD= 118.0300 118.1400 +0.09% +0.23%dinar >Note: calculated from 1800 CET

daily change

Latest Previous Daily Changeclose change in 2019Prague 1056.94 1058.060 -0.11% +7.13%


Budapest 40140.06 40221.18 -0.20% +2.56%Warsaw 2337.78 2346.39 -0.37% +2.69%Bucharest 7680.75 7678.92 +0.02% +4.02%Ljubljana <.SBITOP 831.48 831.34 +0.02% +3.38%>Zagreb 1758.02 1755.28 +0.16% +0.53%Belgrade <.BELEX1 701.09 702.19 -0.16% -7.96%


Sofia 577.54 573.94 +0.63% -2.85%


Yield Yield Spread Daily(bid) change vs Bund change


Czech spread


2-year <CZ2YT=R 1.7920 0.0150 +236bps +2bps


5-year <CZ5YT=R 1.7160 0.0550 +210bps +7bps


10-year <CZ10YT= 1.7590 0.0050 +165bps +2bps

RR> Poland

2-year <PL2YT=R 1.5510 -0.1010 +212bps -10bps


5-year <PL5YT=R 2.1730 -0.0030 +256bps +1bps


10-year <PL10YT= 2.7200 -0.0020 +261bps +1bps




3x6 6x9 9x12 3M

interban k

Czech Rep 2.08 2.11 2.13 1.99



Hungary 0.37 0.59 0.81 0.15Poland 1.73 1.72 1.72 1.72

Note: FRA are for ask prices quotes



(Reporting by Sandor Peto Editing by David Goodman)