CEE MARKETS-Forint scales fresh peak despite technical recession, CEZ jumps

(Updates with forint jump after U.S. data) By Jason Hovet and Krisztina Than PRAGUE/BUDAPEST, Feb 14 (Reuters) - The forint climbed past the 380 per euro level on Tuesday for the first time since May 2022 on the back of a weakening U.S. dollar, helping it shrug off data showing Hungary's economy slipped into a technical recession at the end of last year. Central Europe's currencies have been caught up in U.S. dollar moves in recent trading. On Tuesday, the dollar fell after data showed the annual rise in U.S. consumer prices was the smallest since late 2021, compounding expectations the Federal Reserve may be nearing the end of its tightening cycle. That boosted risk appetite in central Europe, where rate differentials have been shrinking since central banks have already shifted to stable policy rates following sharp hiking cycles between 2021 and 2022. The forint extended earlier gains in afternoon trade following the U.S. data and had gained 0.8% to 379.95 to the euro by 1406 GMT. It has risen already 5% this year, boosted by the highest interest rates in the region. It comes even as data on Tuesday around the region showed the toll high inflation was having in the region, with Hungary following the Czech Republic into a technical recession in the fourth quarter and Poland's economy shrinking on a quarter-on-quarter basis.

The forint has been shored up since last October as the central bank has lifted its key policy rate to 13% and used a one-day deposit rate at 18%. "I cannot see any other reason for these forint gains than the 18% interest rate (on the one-day deposit)," a trader in Budapest said. "As long as this rate prevails, people are pouring money into this." Elsewhere, the Polish zloty rose 0.6%. Romania's leu was steady after economic growth was stronger than expected in the fourth quarter. Other economic data from the region showed economies holding up still, even as high inflation that is sapping consumer demand should slow growth sharply this year, analysts say. "The falls in GDP in Central and Eastern Europe shown in the Q4 figures probably mark the worst of the regional downturn, but we still think that activity will (at best) only stagnate over the first half of this year," Capital Economics said. On stock markets, bourses mostly followed global peers up. Czech majority state-owned utility CEZ jumped a second straight day and hit a fresh more than five-month high amid ongoing speculation into a possible restructuring. Its gains pushed the Prague index to a nearly one-year high. CEE SNAPSHO AT

MARKETS T 1506

CET

CURRENC

IES

Latest Previou Daily Change s

bid close change in 2023 EURCZK Czech <EURCZK 23.7400 23.7440 +0.02% +1.76% = crown =>
EURHUF Hungary <EURHUF 379.950 383.150 +0.84% +5.13% = forint => 0 0
EURPLN Polish <EURPLN 4.7625 4.7900 +0.58% -1.53% = zloty =>
EURRON Romanian <EURRON 4.9015 4.9018 +0.01% +0.84% = leu =>
EURHRK Croatian <EURHRK 7.5330 7.5365 +0.05% +0.05% = kuna =>
EURRSD Serbian <EURRSD 117.200 117.300 +0.09% +0.09% = dinar => 0 0

Note: calculated from 1800

daily CET

change

Latest Previou Daily Change s

close change in 2023 .PX Prague 1411.80 1398.10 +0.98% +17.48 00 % .BUX Budapest 46561.0 46233.4 +0.71% +6.32% 6 7
.WIG20 Warsaw <.WIG20 1852.00 1853.29 -0.07% +3.35% >
.BETI Buchares 12313.0 12336.1 -0.19% +5.57% t 3 4
.SBITO Ljubljan <.SBITO 1187.24 1181.23 +0.51% +13.20 P a P> % .BELEX Belgrade <.BELEX 869.08 872.23 -0.36% +5.39% 15 15>
.SOFIX Sofia <.SOFIX 610.19 612.35 -0.35% +1.45% >

Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic
CZ2YT= 2-year <CZ2YT= 5.6820 -0.1410 +288bp -16bps RR RR> s
CZ5YT= 5-year <CZ5YT= 4.9550 0.0000 +251bp -2bps RR RR> s
CZ10YT <CZ10YT 4.6450 0.0300 +223bp -1bps =RR 10-year =RR> s

Poland
PL2YT= 2-year <PL2YT= 6.2680 -0.0470 +347bp -6bps RR RR> s
PL5YT= 5-year <PL5YT= 6.1490 -0.0030 +371bp -2bps RR RR> s
PL10YT <PL10YT 6.1150 -0.0460 +370bp -8bps =RR 10-year =RR> s

FORWARD

3x6 6x9 9x12 3M interba nk Czech <CZKFRA 7.19 6.99 6.46 7.20 Rep ><PRIBO

R=>

Hungary <HUFFRA 15.00 13.57 12.03 16.13 ><BUBOR

Poland <PLNFRA 6.95 6.88 6.54 6.92 ><WIBOR

Note: are for ask

FRA prices

quotes

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(Reporting by Jason Hovet in Prague and Krisztina Than in Budapest; Editing by Maju Samuel and Alison Williams)

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