CEE MARKETS-Currencies ease as dollar gains, Polish and Romanian cbank decisions in focus

Investors in the region were awaiting a Polish and Romanian rate meeting later this week to seek clues on how policy makers react to a sharp slowdown in economic growth in late 2022, with inflation still running high. Analysts said the Polish central bank and the Romanian central bank were both expected to keep their policy rates on hold at a respective 6.75% and 7.0%. The region's central banks have adopted a wait and see approach for now, keeping interest rates stable, as inflation is still strong while economies have stepped on the brakes. "FX markets are driven by expectations concerning the Fed's rate hikes ...the forint is weakening slightly as the dollar firms and US treasury yields rise," Magyar Bankholding analysts said in a note. The forint , which tested a fresh eight-month high on Friday before the U.S. data, was down half a percent at 389.45 versus the euro. Its losses in early trade on Monday appeared contained. "Should the negative international sentiment prevail for longer, the forint could extend losses, aiming for the 396-400 range," brokerage Equilor said in a note.

Other currencies also eased marginally, with the Polish zloty down 0.1%, retreating to 4.7165 per euro. The zloty is pressured due "to very good data from the U.S. labor market, which strengthens the dollar, and the strengthening of the dollar has never been favorable for currencies in this part of Europe," said Mateusz Sutowicz, financial market analyst at Bank Millennium. The Czech crown lost 0.2% to 23.80 against the euro. The Czech National Bank left rates at a more than two-decade high as expected last week, while saying rate stability for longer was preferred. Currencies and bonds in central Europe got a boost last Thursday from a strong euro, which is the region's main reference currency, after the European Central Bank delivered a 50 basis point interest rate hike. "CEE bonds rallied strongly in reaction to Thursday's ECB meeting," Erste Bank said in a note. Central Europe's bond yields have dropped sharply to begin 2023 in a debt market rally unlikely to fizzle out this year, as stubborn double-digit inflation is expected to ease, a Reuters poll showed late last month. CEE SNAPSHO AT

MARKETS T 0935 CET

CURRENC

IES

Latest Previous Daily Change bid close chang in 2023 e
EURCZK= Czech <EURCZK= 23.8050 23.7620 -0.18 +1.48% crown > %
EURHUF= Hungary <EURHUF= 389.450 387.6000 -0.48 +2.57% forint > 0 %
EURPLN= Polish <EURPLN= 4.7165 4.7120 -0.10 -0.57% zloty > %
EURRON= Romanian <EURRON= 4.8999 4.9000 +0.0 +0.87% leu > 0%
EURHRK= Croatian <EURHRK= 7.5330 7.5365 +0.0 +0.05% kuna > 5%
EURRSD= Serbian <EURRSD= 117.200 117.3600 +0.1 +0.09% dinar > 0 4%

Note: calculated from 1800

daily CET

change

Latest Previous Daily Change close chang in 2023 e
.PX Prague 1356.92 1355.100 +0.1 +12.91 0 3% % .BUX Budapest 45144.6 45396.33 -0.55 +3.08% 2 %
.WIG20 Warsaw 1890.38 1906.13 -0.83 +5.49% %
.BETI Bucharest 12305.1 12275.89 +0.2 +5.50% 2 4%
.SBITOP Ljubljana <.SBITOP 1168.94 1163.32 +0.4 +11.45 > 8% % .CRBEX Zagreb 2112.32 2112.69 -0.02 +703.8 % 7% .BELEX1 Belgrade <.BELEX1 865.76 865.76 +0.0 +4.99% 5 5> 0%
.SOFIX Sofia 611.03 611.28 -0.04 +1.59% %

Yield Yield Sprea Daily d

(bid) change vs change Bund in Czech spread Republic
CZ2YT=R 2-year <CZ2YT=R 5.7060 -0.0080 +312 -5bps R R> bps
CZ5YT=R 5-year <CZ5YT=R 4.8220 -0.0030 +257 -6bps R R> bps
CZ10YT= 10-year <CZ10YT= 4.3970 0.0030 +215 -5bps RR RR> bps

Poland
PL2YT=R 2-year <PL2YT=R 5.9080 -0.0030 +332 -5bps R R> bps
PL5YT=R 5-year <PL5YT=R 5.7360 0.0780 +348 +2bps R R> bps
PL10YT= 10-year <PL10YT= 5.7390 0.0460 +349 -1bps RR RR> bps

FORWARD

3x6 6x9 9x12 3M interba nk Czech Rep 7.14 6.82 6.16 7.20 <PRIBOR=

>

Hungary 14.51 12.79 11.47 16.05 Poland 6.95 6.80 6.39 6.92 Note: FRA are for ask

quotes prices

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(Reporting by Krisztina Than and Anna Koper in Warsaw; Editing by Rashmi Aich)