CEE MARKETS-Czech crown slips on lower chances of rate hikes

WARSAW, May 12 (Reuters) - The Czech crown eased further on Friday, as falling inflation and new fiscal cuts reduced chances for rate hikes, while the Polish and Hungarian currencies firmed. Czech inflation slowed further in April to a headline rate of 12.7%, its lowest since March 2022, data showed on Thursday, taking pressure off a central bank weighing another interest rate hike. Also, the Czech finance minister said the country would cut subsidies and lift taxes as part of plans to deflate state deficits and get the fiscal gap below 2% of gross domestic product in 2024. By 1101 GMT, the Czech crown had dropped 0.29% to 23.6170 per euro, retreating a touch further from the 15-year highs hit last month. "The CZK weakening seen in the past two days can be attributed to a lower-than-expected Czech inflation data for April and also to the fiscal consolidation package presented by the Czech government," said Radomir Jac, Generali Investments CEE chief economist. Meanwhile, the Polish zloty inched up 0.20% to 4.5350 from Thursday's correction, hovering off a 15-month high hit on Wednesday and heading for an eighth straight week of gains. "The zloty is really stabilising. These last two days were quite exciting, but also exhausting for the market," said Mateusz Sutowicz, financial markets analyst at Bank Millennium. Elsewhere, the Hungarian forint firmed 0.16% to 370.6000 per euro. The forint continues to be supported by Hungary's high interest rates and the relatively benign international environment, analysts at MHB Bank said in a note.

CEE SNAPSHOT AT

MARKETS 1301 CET

CURRENCI

ES

Latest Previous Daily Change bid close change in 2023 Czech 23.6170 23.5490 -0.29% +2.29% crown
Hungary 370.6000 371.2000 +0.16% +7.78% forint
Polish 4.5350 4.5440 +0.20% +3.41% zloty
Romanian 4.9320 4.9309 -0.02% +0.21% leu
Serbian 117.2300 117.2700 +0.03% +0.06% dinar
Note: calculated from 1800 CET
daily
change

Latest Previous Daily Change close change in 2023 Prague 1375.78 1387.670 -0.86% +14.48% 0
Budapest 46376.28 46073.98 +0.66% +5.90% Warsaw 1947.80 1918.71 +1.52% +8.69% Bucharest 12062.62 12136.91 -0.61% +3.42% Ljubljana 1218.82 1213.22 +0.46% +16.21% Zagreb 2258.30 2257.74 +0.02% +759.42 % Belgrade <.BELEX15 914.43 915.58 -0.13% +10.89% >
Sofia 629.82 631.43 -0.25% +4.71%

Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic
2-year <CZ2YT=RR 5.6880 0.1640 +307bps +13bps >
5-year <CZ5YT=RR 4.8310 -0.0870 +263bps -13bps >
10-year <CZ10YT=R 4.3940 -0.0060 +214bps -4bps R>
Poland
2-year <PL2YT=RR 5.7530 -0.0870 +314bps -12bps >
5-year <PL5YT=RR 5.7120 -0.0070 +351bps -5bps >
10-year <PL10YT=R 5.7710 0.0120 +352bps -2bps R>

FORWARD

3x6 6x9 9x12 3M interban k Czech Rep < 7.20 6.72 5.96 7.18 PRIBOR=>
Hungary < 14.54 12.87 11.68 16.19 BUBOR=>
Poland < 6.83 6.52 6.15 6.90 WIBOR=>
Note: FRA are for ask prices
quotes

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(Reporting by Karol Badohal in Warsaw, Jason Hovet in Prague and Krisztina Than in Budapest; Editing by Sohini Goswami)

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