CEE MARKETS-Forint stays strong, zloty edges up after GDP rise

PRAGUE, May 15 (Reuters) – The forint hovered around a three-month high on Wednesday, with the Hungarian central bank’s trimmed outlook for interest rate cuts giving a boost, while the Polish zloty again neared four-year highs after GDP data showed a solid start to 2024. The forint was around its strongest since early-February, keeping up a rally seen this month. It got a boost on Tuesday when Deputy Governor Barnabas Virag said the bank raised its base rate outlook to between 6.75% and 7% by the end of June, paring back its outlook on policy easing. The forint was a touch lower at 385.80 per euro at 0944 GMT, off a high of 385.55 hit on Tuesday. Virag’s comments echoed cautious remarks by central bankers across the region as the latest figures show disinflation had bottomed out in the first quarter and central Europe’s economies are beginning to show signs of a recovery in consumer demand. Preliminary first-quarter gross domestic product figures from Poland, Romania and Slovakia, released on Wednesday, backed the recovery view. Poland’s economy accelerated with a 0.4% quarter-on-quarter increase and a 1.9% year-on-year gain. The gains are being backed by consumer activity as inflation has slowed sharply from the double-digit rates seen in recent years. “GDP growth will be based solely on consumption (in the coming quarter),” the Polish Economic Institute said. “As inflation falls, the value of household income increases, which will sooner or later be reflected in larger purchases.” The zloty nudged up to 4.2705 per euro, keeping sight of levels around 4.25 it hit in April. Elsewhere, the crown also held around its strongest levels since late-January as the Czech central bank has also scaled back its rate outlook. The crown was up 0.1% at 24.78 to the euro on Wednesday. Romania’s central bank raised its annual inflation forecast for this year on Wednesday, driven in part by wage pressures and high inflationary expectations, and Governor Mugur Isarescu said interest rate decisions would be data dependant. The Romanian central bank defied market expectations and delayed the start of its own rate-cutting cycle earlier this week. The leu was steady at 4.9762 per euro. CEE SNAPSH AT MARKETS OT 1144 CET CURREN CIES Latest Previo Daily Change us trade close change in 2024 EURCZK Czech <EURCZK 24.780 24.810 +0.12 -0.32% = crown => 0 0 % EURHUF Hungary <EURHUF 385.80 385.70 -0.03% -0.68% = forint => 00 00 EURPLN Polish <EURPLN 4.2705 4.2720 +0.04 +1.73% = zloty => % EURRON Romania <EURRON 4.9762 4.9764 +0.00 -0.04% = n leu => % Note: calcula 1800 daily ted CET change from Latest Previo Daily Change us close change in 2024 .PX Prague 1560.5 1547.5 +0.84 +10.36 5 400 % % .BUX Budapes 68944. 66115. +4.28 +13.73 t 52 42 % % .WIG20 Warsaw <.WIG20 2555.6 2432.3 +5.07 +9.08% > 5 2 % .BETI Buchare 17329. 16919. +2.43 +12.74 st 74 27 % % Spread Daily vs change Bund in Czech spread Republi c CZ2YT= <CZ2YT= 4.0470 -0.043 +110b -1bps RR 2-year RR> 0 ps CZ5YT= <CZ5YT= 4.0060 -0.034 +149b +2bps RR 5-year RR> 0 ps CZ10YT <CZ10YT 4.1240 -0.016 +164b +4bps =RR 10-year =RR> 0 ps Poland PL2YT= <PL2YT= 5.4130 0.0380 +247b +7bps RR 2-year RR> ps PL5YT= <PL5YT= 5.5560 -0.025 +304b +3bps RR 5-year RR> 0 ps PL10YT <PL10YT 5.6850 -0.030 +320b +3bps =RR 10-year =RR> 0 ps (Reporting by Jason Hovet in Prague; Editing ny Mrigank Dhaniwala)

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