Wires

CEE MARKETS-Polish zloty steady, shrugging off inflation jump

BUCHAREST, Jan 7 (Reuters) - The Polish zloty was steady against the euro in early trade on Tuesday as analysts saw no change in the central bank's interest rate policy despite its highest inflation reading since 2012. Flash data showed Polish consumer price inflation at 3.4% on the year in December, above market expectations of 2.9%.

"A strong increase in inflation should be neutral for monetary policy as price pressure remains mostly driven by non-core items," Erste Bank said in a research note. "We continue to see the flat policy rate until the end of 2021." Monika Kurtek, chief economist at Bank Pocztowy, said the inflation level was "certainly disturbing for some MPC (members) and will trigger a discussion on the current monetary policy". "However, interest rate changes should not be expected in the coming months, as the Council will probably want to wait and observe the next data." At 0935 GMT, the zloty was flat at 4.2355 to the euro. Elsewhere in the region, the Romanian leu was also flat ahead of a Wednesday central bank meeting when policymakers are widely expected to leave rates unchanged. The Hungarian forint was down 0.3% at 330.4200 to the euro. The Czech crown was down 0.1% at 25.2500 per euro, after briefly touching its strongest level since Feb. 2018 in late trading on Monday. Analysts said the crown's April 2018 high of 25.400 would continue to act as a resistance level. Stocks mostly rebounded across the region and were firmer, led by Hungary's blue chip index, which was 0.7% higher on the day.

CEE SNAPSHO ATMARKETS T 1057

CET CURRENC IES

Latest Previou Daily Change

s

bid close change in 2020Czech <EURCZK= 25.2490 25.2400 -0.04% +0.72%crown >Hungary <EURHUF= 330.800 329.590 -0.37% +0.10%forint > 0 0Polish <EURPLN= 4.2339 4.2342 +0.01% +0.53%zloty >Romanian <EURRON= 4.7745 4.7755 +0.02% +0.29%leu >Croatian <EURHRK= 7.4475 7.4642 +0.22% -0.03%kuna >Serbian <EURRSD= 117.410 117.510 +0.09% +0.14%dinar > 0 0Note: calculated from 1800daily CET

change

Latest Previou Daily Change

s

close change in 2020Prague 1119.30 1118.43 +0.08% +0.33%

00

Budapest 44945.7 44658.7 +0.64% -2.47%0 6Warsaw 2165.35 2173.97 -0.40% +0.71%Buchares 9876.65 9865.83 +0.11% -1.01%

t

Ljubljan <.SBITOP 933.80 932.92 +0.09% +0.86%a >Zagreb 2035.10 2036.69 -0.08% +0.88%Belgrade <.BELEX1 801.69 801.69 +0.00% +0.00%

5>

Sofia 568.50 570.65 -0.38% +0.06%

BONDS

Yield Yield Spread Daily(bid) change vs Bund change

in

Czech spread

Republic

2-year <CZ2YT=R 1.7130 0.0310 +233bp +3bpsR> s5-year <CZ5YT=R 1.4480 0.0660 +200bp +7bpsR> s<CZ10YT= 1.6010 0.0350 +188bp +2bps10-year RR> s

Poland

2-year <PL2YTR 1.5300 0.0490 +215bp +5bpsR> s5-year <PL5YT=R 1.8720 0.0650 +242bp +7bpsR> s<PL10YT= 2.1410 0.0670 +242bp +6bps10-year RR> sFORWARD RATE AGREEME

NT

3x6 6x9 9x12 3M

interba nk

Czech 2.25 2.24 2.19 2.17Rep <PRIBOR=>Hungary 0.27 0.34 0.45 0.00Poland 1.74 1.73 1.72 1.71Note: are for askFRA prices

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(Reporting by Luiza Ilie in Bucharest, Jason Hovet in Prague and Alan Charlish in Warsaw; Editing by Kevin Liffey)