CEE MARKETS-Forint, crown edge down with rate meetings in focus

By Jason Hovet PRAGUE, March 27 (Reuters) - The Hungarian forint and Czech crown edged down on Monday, as markets turned to central bank meetings due this week to gauge how quickly policymakers may begin interest rate cuts this year. The forint had eased 0.2% by 0825 GMT to sit at 386.0 to the euro, stuck in a range it settled into last week after volatility caused by Credit Suisse being taken over by its Swiss banking rival UBS, along with the implosion of the U.S. Silicon Valley Bank (SVB). With worries persisting over the global banking system, trading in central Europe remained choppy. Stock markets rose in mixed trade, seeking a return to firming paths. On the currency front, attention was turned to Tuesday's Hungarian central bank meeting, with pressure still coming from the government to cut what is the European Union's highest policy interest rate at 13%. "The Hungarian central bank meeting will get the most attention, as markets are waiting for any indication on interest rate normalization," Erste Group Bank said. "Recent market turmoil and the vulnerability of the Hungarian forint in the aftermath of the troubles of the U.S. SVB bank as well as Credit Suisse bank may, however, delay the beginning of interest rate normalization." Global central banks like the U.S. Federal Reserve must now balance concerns over still-high inflation with worry over economies amid potential banking stress. That could mean steadier interest rates in central Europe, where policymakers have held steady on policy since last year following hiking cycles that started sooner than global peers. Analysts in a Reuters poll pared back rate cut views in both Hungary and the Czech Republic. Hungarian rate-setter nominee Eva Buza on Monday said curbing inflation - which has soared to above 20% - as soon as possible was in the national interest. In Czech markets, the crown inched down a touch to 23.715 to the euro before Wednesday's rate meeting, where rates will likely stay on hold as in Hungary. The Polish zloty edged 0.1% higher to 4.688 per euro. The Polish currency has missed out on gains seen by the forint and crown so far this year. Bank of America on Monday recommended a short zloty position against the forint due to Hungary's improving current account and falling gas prices. "The zloty remains unattractive for short-term investors who still prefer to take positions in other CEE currencies," ING said, adding weakening Polish economic data this week could support some expectations of rate cuts coming.

CEE SNAPSHO AT

MARKETS T 1025

CET

CURRENC

IES

Latest Previou Daily Change s

bid close change in 2023 EURCZK Czech <EURCZK 23.7150 23.7100 -0.02% +1.87% = crown =>
EURHUF Hungary <EURHUF 386.000 385.250 -0.19% +3.48% = forint => 0 0
EURPLN Polish <EURPLN 4.6880 4.6910 +0.06% +0.03% = zloty =>
EURRON Romanian <EURRON 4.9360 4.9260 -0.20% +0.13% = leu =>
EURHRK Croatian <EURHRK 7.5330 7.5365 +0.05% +0.05% = kuna =>
EURRSD Serbian <EURRSD 117.280 117.350 +0.06% +0.02% = dinar => 0 0

Note: calculated from 1800

daily CET

change

Latest Previou Daily Change s

close change in 2023 .PX Prague 1296.31 1290.65 +0.44% +7.87% 00
.BUX Budapest 42170.5 41818.9 +0.84% -3.71% 6 2
.WIG20 Warsaw <.WIG20 1680.67 1670.18 +0.63% -6.21% >
.BETI Buchares 12055.4 11989.9 +0.55% +3.36% t 4 0
.SBITO Ljubljan <.SBITO 1185.13 1180.38 +0.40% +13.00 P a P> % .BELEX Belgrade <.BELEX 894.76 891.15 +0.41% +8.51% 15 15>
.SOFIX Sofia <.SOFIX 602.10 601.32 +0.13% +0.10% >

Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic
CZ2YT= 2-year <CZ2YT= 5.4070 0.0630 +294bp -2bps RR RR> s
CZ5YT= 5-year <CZ5YT= 4.8440 0.0320 +270bp -2bps RR RR> s
CZ10YT <CZ10YT 4.5570 -0.0100 +239bp -5bps =RR 10-year =RR> s

Poland
PL2YT= 2-year <PL2YT= 6.0230 0.0250 +356bp -6bps RR RR> s
PL5YT= 5-year <PL5YT= 6.0320 0.0740 +389bp +2bps RR RR> s
PL10YT <PL10YT 6.0930 0.0710 +393bp +3bps =RR 10-year =RR> s

FORWARD

3x6 6x9 9x12 3M interba nk Czech <CZKFRA 7.11 6.71 5.97 7.19 Rep ><PRIBO

R=>

Hungary <HUFFRA 14.40 12.65 11.69 16.30 ><BUBOR

=>

Poland <PLNFRA 6.80 6.61 6.18 6.90 ><WIBOR

=>

Note: are for ask

FRA prices

quotes

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(Reporting by Jason Hovet in Prague, Krisztina Than in Budapest, and Karol Badohal in Warsaw; Editing by Varun H K)

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