CEE MARKETS-FX steady before US inflation data, forint shrugs off stubborn inflation

By Alan Charlish WARSAW, April 12 (Reuters) - Central European currencies hovered near recent levels on Wednesday as markets looked ahead to an inflation reading in the United States, while digesting stubbornly high price growth closer to home in Hungary. Hungarian headline inflation eased less-than-expected in March, remaining above 25% in a sign that interest rates may stay high for longer as the central bank resists further hikes or rushing into eventual rate cuts. With Hungary and other central European policymakers holding rates steady, attention is on bigger global peers who started their tightening policy later. Their hikes now are cutting into interest rate differentials with central Europe. Investors await the March inflation print in the United States, which will likely influence how soon the Federal Reserve will end its tightening policy. "Today is a data-driven day... ahead of the data, I do not think many people will take a risk," said a Warsaw-based currency trader. The Polish zloty and the Czech crown were broadly stable against the euro at 4.6655 and 23.48 respectively. The Hungarian forint fell 0.17% to 376.10, as investors appeared to shrug off a March inflation reading. Hungarian headline inflation edged down to 25.2%, missing expectations for a drop to 24.7%. Core inflation edged up to 25.7%, according to the statistics office, also defying expectations. "The Hungarian Central Bank cannot yet cut interest rates in the coming months with such inflation figures," said Zoltan Varga, an analyst at brokerage Equilor. The forint has been a top performer in the CEE this year, but ING said room for a further rally was limited.

"At the global level, EUR/USD will not deliver another significant boost anytime soon and the market has almost fully normalised after the March turmoil," ING said. The benchmark Polish 10-year bond yield edged higher, rising 3.4 basis points (bps) to 6.206%. The Czech 10-year yield rose 4.8 bps to 4.629. "The expected drop in (U.S.) consumer inflation to close to 5% in March against 6% in February and the first signs of a worse situation in the labour market will not increase the probability of interest rate hikes," PKO BP said in a note.

"As a result, the yield on Polish bonds can be expected to remain around 6.1%." CEE SNAPSHOT AT

MARKETS 1038

CET

CURRENCI

Latest Previo Daily Change us

bid close change in 2023 EURCZK= Czech 23.4800 23.475 -0.02% +2.89% crown 0
EURHUF= Hungary 376.1000 375.45 -0.17% +6.21% forint 00
EURPLN= Polish 4.6655 4.6670 +0.03% +0.52% zloty
EURRON= Romania 4.9385 4.9351 -0.07% +0.08% n leu
EURRSD= Serbian 117.2200 117.30 +0.07% +0.07% dinar 00

Note: calculated from 1800

daily CET

change

Latest Previo Daily Change us

close change in 2023 .PX Prague 1403.53 1405.3 -0.13% +16.79% 000
.BUX Budapes 44196.19 44408. -0.48% +0.92% t 12
.WIG20 Warsaw 1783.96 1783.3 +0.04% -0.45% 1
.BETI Buchare 12450.90 12446. +0.04% +6.75% st 02
.SBITOP Ljublja 1224.28 1220.0 +0.35% +16.73% na 7
.BELEX1 Belgrad <.BELEX15 871.83 868.31 +0.41% +5.73% 5 e >
.SOFIX Sofia 612.19 612.84 -0.11% +1.78%

Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republi

c
CZ2YT=R <CZ2YT=RR 5.7990 0.0480 +307bp +2bps R 2-year > s
CZ5YT=R <CZ5YT=RR 5.0450 0.0170 +271bp +0bps R 5-year > s
CZ10YT= <CZ10YT=R 4.6290 0.0480 +232bp +5bps RR 10-year R> s

Poland
PL2YT=R <PL2YT=RR 6.1470 -0.101 +341bp -13bps R 2-year > 0 s
PL5YT=R <PL5YT=RR 6.1440 0.0130 +381bp +0bps R 5-year > s
PL10YT= <PL10YT=R 6.2060 0.0340 +390bp +3bps RR 10-year R> s

FORWARD

3x6 6x9 9x12 3M interban k Czech < 7.15 6.87 6.19 7.18 Rep PRIBOR=>

Hungary < 15.15 13.41 12.23 16.30 BUBOR=>

Poland < 6.85 6.73 6.36 6.90 WIBOR=>

Note: are for ask prices

FRA

quotes

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(Reporting by Alan Charlish in Warsaw and Jason Hovet in Prague; Editing by Sonia Cheema)

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CEE MARKETS-FX steady before US inflation data, forint shrugs off stubborn inflation

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