CEE MARKETS-Zloty pulls back from 15-month high, forint cheers trade data

By Jason Hovet PRAGUE, May 9 (Reuters) - The zloty pulled back from a 15-month high on Tuesday as a stronger U.S. dollar cooled appetite for central Europe's currencies, and investors eyed a Polish interest rate decision this week. Markets expect no change to Polish interest rates after the bank meets on Wednesday, although its statements will be closely parsed after Hungarian policymakers took a first step to rate cuts last month, while Czech rate setters came close agreeing a fresh hike to tamp down price pressures. Most attention will come on Thursday when Polish central bank Governor Adam Glapinski should speak. Glapinski said in an interview with Gazeta Polska weekly last week that he hoped the bank could start cutting rates at the end of the year. "We believe that... (his) comments will be mild, and thus they will contribute to a slight weakening of the zloty," Bank Millennium said. "As a result, EUR/PLN quotations will move towards 4.60." The zloty was 0.2% down on the day on Tuesday at 4.569 to the euro, after touching 4.559 - its highest since February 2022 before Russia invaded Ukraine - to start the day. The Polish currency has jumped 2.7% in the past month, after being lifeless to begin the year. The Hungarian forint, though, has remained the strongest in 2023, up around 7.5%, and was 0.2% firmer at 371.50 per euro on Tuesday. Improving trade balances should add support. Data on Tuesday showed Hungary's trade surplus in March was the highest since January 2021. It follows a trend seen around central Europe as car exports grow in value and energy imports' value falls, flipping balances from large deficits seen last year. Central bank deputy governor Barnabas Virag said on Tuesday that the risk environment will be key for the bank when to decide to cut its 18% one-day deposit rate that has helped attract money flows and driven gains for the forint. "In a broadly improving risk environment, the high-beta forint is performing strongly," Commerzbank said. "Assuming that policymakers will manage to restore confidence and limit contagion in the banking sector, we anticipate a firm forint this year, especially when inflation begins to moderate worldwide and in the euro zone – in this window, we see EUR-HUF in the 370 range." Elsewhere, the crown rose 0.1% to 23.357 to the euro as local markets opened following a long holiday weekend. Stock markets in the region were weaker, following global moods as investors remained cautious amid weak Chinese trade data and the impasse over the U.S. debt ceiling.

CEE SNAPSHO AT

MARKETS T 1228

CET

CURRENC

IES

Latest Previou Daily Change s

bid close change in 2023 EURCZK Czech <EURCZK 23.3570 23.3900 +0.14% +3.43% = crown =>
EURHUF Hungary <EURHUF 371.500 372.200 +0.19% +7.52% = forint => 0 0
EURPLN Polish <EURPLN 4.5690 4.5600 -0.20% +2.64% = zloty =>
EURRON Romanian <EURRON 4.9200 4.9200 +0.00% +0.46% = leu =>
EURRSD Serbian <EURRSD 117.230 117.300 +0.06% +0.06% = dinar => 0 0

Note: calculated from 1800

daily CET

change

Latest Previou Daily Change s

close change in 2023 .PX Prague 1381.48 1390.45 -0.65% +14.96 00 % .BUX Budapest 46567.0 46638.6 -0.15% +6.33% 5 0
.WIG20 Warsaw <.WIG20 1913.35 1922.08 -0.45% +6.77% >
.BETI Buchares 12236.7 12228.7 +0.07% +4.91% t 5 1
.SBITO Ljubljan <.SBITO 1217.52 1224.65 -0.58% +16.09 P a P> % .BELEX Belgrade <.BELEX 915.04 911.54 +0.38% +10.97 15 15> % .SOFIX Sofia <.SOFIX 610.09 613.91 -0.62% +1.43% >

Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic
CZ2YT= 2-year <CZ2YT= 5.7130 -0.3080 +306bp -30bps RR RR> s
CZ5YT= 5-year <CZ5YT= 4.9900 -0.0730 +274bp -5bps RR RR> s
CZ10YT <CZ10YT 4.5190 -0.0550 +222bp -4bps =RR 10-year =RR> s

Poland
PL2YT= 2-year <PL2YT= 5.7210 -0.1280 +307bp -12bps RR RR> s
PL5YT= 5-year <PL5YT= 5.7340 -0.0640 +348bp -5bps RR RR> s
PL10YT <PL10YT 5.7960 -0.0360 +350bp -2bps =RR 10-year =RR> s

FORWARD

3x6 6x9 9x12 3M interba nk Czech <CZKFRA 7.28 6.84 6.09 7.18 Rep ><PRIBO

R=>

Hungary <HUFFRA 14.69 12.87 11.68 16.20 ><BUBOR

=>

Poland <PLNFRA 6.78 6.43 6.02 6.90 ><WIBOR

=>

Note: are for ask

FRA prices

quotes

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(Reporting by Jason Hovet in Prague, Pawel Florkiewicz in Warsaw, and Boldizsar Gyori in Budapest; Editing by Varun H K)

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