CEE MARKETS-Forint leads FX lower as PM Orban takes aim at Hungary cbank policy

By Krisztina Than BUDAPEST, March 10 (Reuters) - Hungary's forint led Central European currencies lower on Friday and the region's stocks fell amid a soured global mood, with a dispute between the Hungarian central bank and the government weighing on the currency. The forint hit lows of 385.85 against the euro in the day, before recovering slightly to trade 1.1% lower at 383.45. "There is this squabble between the central bank and the government ... and this does not do any good," a forex dealer in Budapest said. He said the policy dispute probably had a sobering impact on some investors, who have poured money into the bank's one-day deposit offered at 18% in the past months, signalling that the outlook for the Hungarian economy was less benign as some had anticipated. "I think the market has been overly optimistic," the dealer said, adding that he did not expect the central bank would cut interest rates at its March 28 monthly meeting, even though inflation declined marginally in February to an annual 25.4%. "The risks for the NBH delaying the first cut of the 1-day deposit rate, currently at 18%, to 2Q23 seem to have increased, in our view," Morgan Stanley also said in a note on Friday. Hungarian Prime Minister Viktor Orban said on Thursday that the National Bank of Hungary's cuts to money supply were too drastic as inflation has probably peaked and price growth was driven by energy costs and sanctions on Russia. The comments, which came after sharp criticism by the central bank chief of the government's economic policy, raised concerns among some investors. Czech headline inflation eased to 16.7% year-on-year in February, data showed on Friday, reinforcing the view that surging price growth is moving past a peak as the Czech central bank seeks to maintain stable interest rates. And in Poland, the zloty eased 0.1% to 4.6890 as markets digested the National Bank of Poland (NBP)'s inflation forecasts. Investors in the region were also eyeing key U.S. jobs data for clues on the Federal Reserve's interest rate trajectory due later on Friday. On Wednesday the Polish central bank left its main interest rate unchanged at 6.75% as the region's central banks seek to keep rates stable for now. Stocks were lower across the region, with the main indices in Prague, Warsaw and Budapest falling 0.7 to 1.7%. Amid the stock market gloom, shares of OTP also dropped 1.3% to 9,932 forints by 0947 GMT, after the bank reported fourth-quarter earnings. "OTP published better than expected key figures for Q4," Magyar Bankholding analysts said.

CEE SNAPSHOT AT

MARKETS 1015

CET

CURRENCIE

Latest Previo Daily Change us

bid close change in 2023 EURCZK Czech <EURCZK 23.6630 23.590 -0.31% +2.09% = crown => 0
EURHUF Hungary <EURHUF 383.4500 379.20 -1.11% +4.17% = forint => 00
EURPLN Polish <EURPLN 4.6890 4.6850 -0.09% +0.01% = zloty =>
EURRON Romanian <EURRON 4.9139 4.9140 +0.00% +0.58% = leu =>
EURHRK Croatian <EURHRK 7.5330 7.5365 +0.05% +0.05% = kuna =>
EURRSD Serbian <EURRSD 117.2200 117.31 +0.08% +0.07% = dinar => 00

Note: calculated from 1800

daily CET

change

Latest Previo Daily Change us

close change in 2023 .PX Prague 1380.72 1396.6 -1.14% +14.89 100 % .BUX Budapest 42475.97 42816. -0.80% -3.01% 43
.WIG20 Warsaw <.WIG20 1804.84 1835.9 -1.69% +0.72% > 4
.BETI Buchares 12389.48 12472. -0.66% +6.22% t 32
.SBITO Ljubljan <.SBITO 1189.83 1188.8 +0.09% +13.45 P a P> 0 % .BELEX Belgrade <.BELEX 895.17 892.16 +0.34% +8.56% 15 15>
.SOFIX Sofia <.SOFIX 635.36 632.84 +0.40% +5.63% >

Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic
CZ2YT= 2-year <CZ2YT= 5.8990 0.0980 +276bp +24bps RR RR> s
CZ5YT= 5-year <CZ5YT= 5.2240 -0.062 +256bp +7bps RR RR> 0 s
CZ10YT <CZ10YT 4.8280 -0.105 +231bp +1bps =RR 10-year =RR> 0 s

Poland
PL2YT= 2-year <PL2YT= 6.1330 -0.146 +299bp -1bps RR RR> 0 s
PL5YT= 5-year <PL5YT= 6.1970 -0.043 +353bp +9bps RR RR> 0 s
PL10YT <PL10YT 6.2000 -0.058 +368bp +6bps =RR 10-year =RR> 0 s

FORWARD

3x6 6x9 9x12 3M interba nk Czech <CZKFRA 7.21 7.03 6.49 7.20 Rep ><PRIBO

R=>

Hungary <HUFFRA 14.72 13.07 11.71 16.30 ><BUBOR

Poland <PLNFRA 6.94 6.78 6.43 6.93 ><WIBOR

Note: are for ask prices

FRA

quotes

*********************************************

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(Reporting by Krisztina Than; Editing by Varun H K)

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