CEE MARKETS-Zloty retreats after recent gains as FX weakens, CEZ swings continue

PRAGUE, Feb 21 (Reuters) - Central Europe's currencies sagged on Tuesday, with weak euro zone manufacturing indicators weighing, while below-forecast retail data also helped push the Polish zloty into retreat after recent gains. Stock markets also fell along with European peers, although Prague bucked the trend and rose after a jump in Czech utility CEZ propped the index up. A softer euro, central Europe's reference currency, added to pressure in the region. The zloty fell 0.2% to 4.747 to the euro, after retail sales at constant prices eased in January for the first time in two years, signalling a soft start to 2023 for central Europe's biggest economy. "Today's data is disappointing, but is in line with the expected weakening of consumer spending due to significant declines in real incomes," ING said. The zloty drop comes after the currency rebounded from a four-month low near 4.80 hit last week. In Hungary, the forint eased 0.1%, holding just off nine-month highs hit this month as high interest rates keep up support. Inflation in Hungary is the strongest in central Europe, sitting at a rate over 20%, and the central bank has the highest interest rates in the European Union after sharp hikes last year.

"We see the forint staying strong during 2023 as inflation moderates, but the central bank holds interest rates at a relatively high level," Commerzbank said in a Feb. 20 note. "Since international institutions are known to trade the PLN-HUF cross, negative PLN developments can automatically boost HUF. This rally might extend modestly further in the near-term as inflation begins to moderate – in this window, we see EUR-HUF in the 380 range." The Czech crown also sat near recent highs as it has soared to its strongest in over 14 years to begin the year, helped by easing energy prices soothing markets and a traditional safe-haven status in the region. Prague's PX stock index rose, helped by gains in CEZ shares, which have swung wildly in recent weeks amid ongoing speculation on how the government, which controls 70% of shares, could restructure the company this year, like it has signalled. CEE SNAPSHO AT

MARKETS T 1147

CET

CURRENC

IES

Latest Previou Daily Change s

bid close change in 2023 EURCZK Czech <EURCZK 23.7500 23.7170 -0.14% +1.72% = crown =>
EURHUF Hungary <EURHUF 383.550 383.150 -0.10% +4.14% = forint => 0 0
EURPLN Polish <EURPLN 4.7465 4.7380 -0.18% -1.20% = zloty =>
EURRON Romanian <EURRON 4.9180 4.9182 +0.00% +0.50% = leu =>
EURHRK Croatian <EURHRK 7.5330 7.5365 +0.05% +0.05% = kuna =>
EURRSD Serbian <EURRSD 117.300 117.300 +0.00% +0.00% = dinar => 0 0

Note: calculated from 1800

daily CET

change

Latest Previou Daily Change s

close change in 2023 .PX Prague 1388.80 1379.34 +0.69% +15.57 00 % .BUX Budapest 45000.8 45225.8 -0.50% +2.76% 1 6
.WIG20 Warsaw <.WIG20 1826.63 1849.48 -1.24% +1.93% >
.BETI Buchares 12388.6 12354.5 +0.28% +6.22% t 4 1
.SBITO Ljubljan <.SBITO 1194.80 1192.78 +0.17% +13.92 P a P> % .BELEX Belgrade <.BELEX 879.59 876.33 +0.37% +6.67% 15 15>
.SOFIX Sofia <.SOFIX 610.25 610.49 -0.04% +1.46% >

Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic
CZ2YT= 2-year <CZ2YT= 5.7340 -0.2110 +280bp -25bps RR RR> s
CZ5YT= 5-year <CZ5YT= 5.1710 0.0680 +260bp +2bps RR RR> s
CZ10YT <CZ10YT 4.8130 0.0630 +232bp +3bps =RR 10-year =RR> s

Poland
PL2YT= 2-year <PL2YT= 6.5950 0.0360 +366bp -1bps RR RR> s
PL5YT= 5-year <PL5YT= 6.6940 0.1460 +412bp +10bps RR RR> s
PL10YT <PL10YT 6.7210 0.1460 +423bp +12bps =RR 10-year =RR> s

FORWARD

3x6 6x9 9x12 3M interba nk Czech <CZKFRA 7.21 7.01 6.52 7.20 Rep ><PRIBO

R=>

Hungary <HUFFRA 15.86 14.47 13.02 16.27 ><BUBOR

=>

Poland <PLNFRA 6.99 7.08 6.86 6.96 ><WIBOR

=>

Note: are for ask

FRA prices

quotes

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(Reporting by Jason Hovet in Prague; Editing by Shounak Dasgupta)