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CEE MARKETS-Forint slightly weaker after GDP data, underperforms

BUDAPEST, May 31 (Reuters) - The forint eased early on Friday, giving back some of Thursday's gains, after final data confirmed first-quarter economic growth of 5.3 percent, well above Hungary's long-term potential. At 0834 GMT, the forint traded down 0.06 percent at 324.81 per euro, rebounding from morning lows on the weaker side of the 325 mark. Most other central European currencies were unchanged or slightly stronger. With a 1.1% loss for the year, the forint is the region's second-worst performer behind the Romanian leu, which shed 2%. The National Bank of Hungary, central Europe's most dovish central bank, left interest rates unchanged on Tuesday and reiterated its dovish stance despite a continued rise in inflation near the top of its 2-4% target range. Its next policy meeting is due on June 25, when policy makers will also discuss the next update of the bank's quarterly inflation report. The bank has said it would only adjust policy if the latest projections make any change necessary. However, some analysts and market participants have questioned the sustainability of the bank's accommodative policy amid double-digit wage rises, a lending boom, strong inflation and economic growth well above Hungary's long-term average. "The next important milestone will be the inflation data," a Budapest based currency dealer said, adding that global factors, such as the U.S.-China trade war and stock market volatility could also affect the forint, which sank to 9-month-lows early this week. Hungary will publish May inflation data next Friday after April data published earlier this month showed price growth rising to a seven-year-high of 3.9%. "If the economy grows above its potential for a sustained period, it raises the risk of an increasing amount of risky loans being issued, real estate prices free-wheeling, and households turning too bold and starting to consume beyond their means," analyst David Nemeth at K&H said in a note. "These factors can give rise to imbalances and, if the economy slows, growth can suddenly fall well below potential as a consequence."

CEE SNAPSHO ATMARKETS T 1034

CET CURRENC IES

Latest Previou Daily Change

s

bid close change in 2019Czech <EURCZK 25.8350 25.8450 +0.04% -0.50%crown =>Hungary <EURHUF 324.810 324.600 -0.06% -1.15%forint => 0 0Polish <EURPLN 4.2888 4.2892 +0.01% +0.02%zloty =>Romanian <EURRON 4.7512 4.7531 +0.04% -2.05%leu =>Croatian <EURHRK 7.4200 7.4190 -0.01% -0.13%kuna =>Serbian <EURRSD 117.810 117.910 +0.08% +0.42%dinar => 0 0Note: calculated from 1800daily CET

change

Latest Previou Daily Change

s

close change in 2019Prague 1042.81 1043.62 -0.08% +5.70%

00

Budapest 40788.4 41075.8 -0.70% +4.21%8 7Warsaw <.WIG20 2211.45 2221.56 -0.46% -2.86%>Buchares 8386.87 8403.12 -0.19% +13.59t %Ljubljan <.SBITO 874.91 877.52 -0.30% +8.78%a P>Zagreb <.CRBEX 1852.17 1854.92 -0.15% +5.91%>Belgrade <.BELEX 730.23 732.06 -0.25% -4.13%

15>

Sofia <.SOFIX 581.38 582.14 -0.13% -2.20%>

BONDS

Yield Yield Spread Daily(bid) change vs Bund change

in

Czech spread

Republic

2-year <CZ2YT= 1.6240 0.0300 +229bp +5bpsRR> s5-year <CZ5YT= 1.7100 0.0620 +229bp +9bpsRR> s<CZ10YT 1.7360 -0.0020 +194bp +3bps10-year =RR> s

Poland

2-year <PL2YT= 1.6660 -0.0110 +233bp +1bpsRR> s5-year <PL5YT= 2.1220 -0.0200 +270bp +0bpsRR> s<PL10YT 2.6910 -0.0370 +289bp +0bps10-year =RR> sFORWARD RATE AGREEME

NT

3x6 6x9 9x12 3M

interba nk

Czech <CZKFRA 2.18 2.10 2.03 2.19Rep ><PRIBO

R=>

Hungary <HUFFRA 0.36 0.54 0.67 0.20><BUBOR

=>

Poland <PLNFRA 1.74 1.74 1.74 1.72><WIBOR

=>

Note: are for askFRA prices

quotes

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(Reporting by Gergely Szakacs)