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CEE MARKETS-Forint slips ahead of rate decision

Marton Dunai

BUDAPEST, June 25 (Reuters) - Hungary's forint weakened slightly ahead of a central bank rate decision due later on Tuesday which is expected to leave rates flat despite inflation pressures. The Hungarian unit underperformed regional peers, which were broadly unchanged, although it remained in the wider range around 324 against the euro it has charted in recent days. Analysts said they expected Hungarian rates to stay unchanged after the European Central Bank struck a dovish tone, even with inflation in Hungary at the top of the central bank's tolerance range around 4 percent. "Emotions have calmed down ahead of the rate decision today, even considering the decision's probably limited impact," Erste Bank said in a note to clients. The forint would likely bounce back from resistance at 325 to the euro and correct toward stronger levels, it added. Takarekbank analysts said they also expected no change but on the off-chance of any monetary tightening, the forint could gain significantly. The region's largest economy, Poland, is on a robust course despite recent weaker retail sales data, mbank said in a research note. Poland on Monday reported annual retail sales growth slowed to 7.3% in May from 13.6% in April, somewhat below analyst forecasts. These numbers "don't change the general positive picture of the Polish economy," mbank said. "The fact that (major) central banks are easing monetary policy should in the longer term strengthen the zloty." "In the coming days though the zloty should remain stable; bigger moves can only be expected on Friday after data on inflation or information from the G20 summit." The region's stocks followed a weakening in emerging markets as uncertainty weighed ahead of a Trump-Xi meeting at the G20 Summit.

CEE SNAPSHOT ATMARKETS 1037 CET

CURRENCI ES

Latest Previous Daily Changebid close change in 2019Czech 25.5580 25.5750 +0.07% +0.58%

crown

Hungary 324.2000 323.4500 -0.23% -0.96%

forint

Polish 4.2560 4.2535 -0.06% +0.79%

zloty

Romanian 4.7210 4.7229 +0.04% -1.42%

leu

Croatian 7.3960 7.3973 +0.02% +0.19%

kuna

Serbian 117.7700 117.8300 +0.05% +0.45%

dinar

Note: calculated from 1800 CET

daily change

Latest Previous Daily Changeclose change in 2019Prague 1046.86 1056.180 -0.88% +6.11%

0

Budapest 40360.72 40475.09 -0.28% +3.12%Warsaw 2320.79 2331.08 -0.44% +1.94%Bucharest 8634.35 8625.92 +0.10% +16.94%Ljubljana 890.23 890.23 +0.00% +10.69%Zagreb 1905.02 1905.02 +0.00% +8.93%Belgrade <.BELEX15 720.44 720.44 +0.00% -5.42%>Sofia 577.50 580.11 -0.45% -2.85%

BONDS

Yield Yield Spread Daily(bid) change vs Bund change

in

Czech spread

Republic

2-year <CZ2YT=RR 1.5820 0.0980 +231bps +9bps>5-year <CZ5YT=RR 1.3390 0.0190 +199bps +2bps>10-year <CZ10YT=R 1.5260 0.0040 +184bps +1bps

R> Poland

2-year <PL2YT=RR 1.5770 -0.0310 +230bps -4bps>5-year <PL5YT=RR 1.9200 -0.0360 +257bps -4bps>10-year <PL10YTR 2.3390 -0.0200 +265bps -1bps

R>

FORWARD RATE AGREEMEN

T

3x6 6x9 9x12 3M

interban k

Czech Rep < 2.18 2.08 1.99 2.17

PRIBOR=>

Hungary < 0.31 0.43 0.53 0.24

BUBOR=>

Poland < 1.74 1.73 1.71 1.72

WIBOR=> Note: FRA are for ask prices quotes

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(Reporting by Marton Dunai; Editing by Andrew Heavens)