CEE MARKETS-Forint, zloty firm as rate cut chances fade

By Alan Charlish WARSAW, April 17 (Reuters) - The Polish zloty and Hungarian forint firmed on Monday as sticky inflation in the region dampened expectations of rate cuts. Polish inflation eased less that expected in March while core inflation continued to rise, statistics office data showed, making markets push back their expectations of rate cuts. In Hungary price growth has remained above 25%, signalling elevated interest rates may stay high longer. The Polish currency also got a boost last week when the country's current account surplus came in well above expectations, helped by strong export growth. "We have some positive domestic arguments, I mean the latest data about current account balance ... but also that the character of stubbornly high inflation erased one of the interest rate cuts priced in for this year, which is of course helping the currency," Mateusz Sutowicz, financial market analyst at Bank Millennium, said. At 1038 GMT the zloty was 0.24% stronger against the euro at 4.628, while the forint was 0.52% firmer at 371.65. "The Hungarian forint is strong today due to the high interest rate Hungary offers ... and inflation data published last week means the market does not expect a cut in interest rates at next week's monthly rate meeting," a currency trader in Budapest said. The Hungarian central bank left its quick deposit rate at 18% on Monday. In the Czech Republic, where the central bank has also sought to dampen expectations of quick interest rate cuts, the crown was 0.23% weaker at 23.375. Stocks were mainly higher across the region, with the main indices in Warsaw, Budapest and Prague up 0.05%-0.71%. In Warsaw, footwear and apparel retailer CCC rose over 3% after its chief executive said he expects double-digit sales growth this year and improving margins, as easing inflation should give consumers more purchasing power.

CEE SNAPSHO AT

MARKETS T 1238

CET

CURRENC

IES

Latest Previou Daily Change s

bid close change in 2023 EURCZK Czech <EURCZK 23.3750 23.3210 -0.23% +3.35% = crown =>
EURHUF Hungary <EURHUF 371.650 373.600 +0.52% +7.48% = forint => 0 0
EURPLN Polish <EURPLN 4.6280 4.6390 +0.24% +1.33% = zloty =>
EURRSD Serbian <EURRSD 117.240 117.300 +0.05% +0.05% = dinar => 0 0

Note: calculated from 1800

daily CET

change

Latest Previou Daily Change s

close change in 2023 .PX Prague 1419.09 1418.37 +0.05% +18.09 00 % .BUX Budapest 43590.9 43285.2 +0.71% -0.46% 5 3
.WIG20 Warsaw <.WIG20 1860.29 1854.27 +0.32% +3.81% >
.BETI Buchares 12459.8 12459.8 +0.00% +6.83% t 5 5
.SBITO Ljubljan <.SBITO 1236.34 1229.53 +0.55% +17.88 P a P> % .BELEX Belgrade <.BELEX 878.88 878.88 +0.00% +6.58% 15 15>
.SOFIX Sofia <.SOFIX 615.55 615.55 +0.00% +2.34% >

Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic
CZ2YT= 2-year <CZ2YT= 5.7820 0.0200 +290bp +0bps RR RR> s
CZ5YT= 5-year <CZ5YT= 5.2780 0.0340 +279bp +0bps RR RR> s
CZ10YT <CZ10YT 4.8590 0.0620 +240bp +4bps =RR 10-year =RR> s

Poland
PL2YT= 2-year <PL2YT= 6.1470 -0.0840 +327bp -10bps RR RR> s
PL5YT= 5-year <PL5YT= 6.1540 0.0030 +366bp -3bps RR RR> s
PL10YT <PL10YT 6.2060 0.0080 +375bp -2bps =RR 10-year =RR> s

FORWARD

3x6 6x9 9x12 3M interba nk Czech <CZKFRA 7.23 7.03 6.43 7.18 Rep ><PRIBO

R=>

Hungary <HUFFRA 15.61 13.96 12.62 16.31 ><BUBOR

=>

Poland <PLNFRA 6.86 6.80 6.44 6.90 ><WIBOR

=>

Note: are for ask

FRA prices

quotes

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

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

(Reporting by Alan Charlish in Warsaw and Boldizsar Gyori in Budapest; Editing by Shounak Dasgupta)