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CEE MARKETS-Hungarian forint hits 3-month high, higher inflation fuels rate expectations

    BUCHAREST, May 14 (Reuters) - The Hungarian forint firmed to
a three-month high against the euro on Friday, boosted by high
short-term interest rates, while other central and eastern
European currencies and stocks were mixed.
    By 0938 GMT, the forint was up 0.2% on the day,
trading at 356.10 per euro. Long-term government bond yields
were stable.  
    "The forint is firming because the high CPI data fuels rate
hike expectations," a Budapest-based trader said. "Also,
short-term rates in Hungary are the highest in the region and
that gives the forint an advantage among its peers." 
    Hungarian headline inflation jumped to 5.1% year-on-year in
April from 3.7% in March, exceeding market forecasts, data
showed earlier this week. Bond yields in both Hungary and Poland
rose as higher-than-expected inflation data reinforced
expectations of policy tightening.
    However, while most CEE countries reported higher than
expected inflation for April, most rate setters in the region
look set to weather the spike and let their economies rebound
from the COVID-19 shutdown before tightening policy.

    The Polish zloty was down 0.2% against the euro at
0938 GMT. 
    The Polish economy shrank slightly less than expected in the
first quarter of 2021, data showed on Friday, while inflation
was 4.3% year-on-year, in line with a flash estimate and above
the upper limit of the central bank's target range.
    "Strong GDP data will, however, further escalate inflation
concerns," Commerzbank said in a research note. 
    "Inflation data have recently surprised to the upside and
the central bank anticipates this to continue for some more
time. Still, no proactive change in policy stance from NBP is
likely."
    Elsewhere in the region, the Czech crown was down
0.1% on the day. The Romanian leu was flat despite the
central bank sharply lifting its end-2021 inflation forecast to
4.1%, above target.
    Stocks were mixed, with Prague's and Budapest's
up 0.1% and 0.2%, respectively, while Warsaw's and
Bucharest's were down 0.7% and 0.2%.
    South African conglomerate Steinhoff said on Friday
it had set the price of shares in discount retailer Pepco at 40
zlotys (8.8 euros) in its Warsaw listing, giving the company a
market capitalisation of 23 billion zlotys (5 billion euros).
 
    
           CEE       SNAPSHO   AT                      
           MARKETS   T        1159              
                              CET               
                     CURRENC                           
                     IES                        
                     Latest   Previou  Daily    Change
                              s                 
                     bid      close    change   in 2021
 Czech     <EURCZK=  25.5300  25.4890   -0.16%   +2.74%
 crown     >                                    
 Hungary   <EURHUF=  356.030  356.800   +0.22%   +1.88%
 forint    >               0        0           
 Polish    <EURPLN=   4.5344   4.5265   -0.17%   +0.55%
 zloty     >                                    
 Romanian  <EURRON=   4.9252   4.9265   +0.03%   -1.22%
 leu       >                                    
 Croatian  <EURHRK=   7.5190   7.5263   +0.10%   +0.38%
 kuna      >                                    
 Serbian   <EURRSD=  117.510  117.560   +0.04%   +0.05%
 dinar     >               0        0           
 Note:     calculated from             1800            
 daily                                 CET      
 change Latest   Previou  Daily    Change
                              s                 
                              close    change   in 2021
 Prague              1117.29  1105.41   +1.07%   +8.78%
                                   00           
 Budapest            45091.5  44974.0   +0.26%   +7.09%
                           5        8           
 Warsaw              2074.11  2089.32   -0.73%   +4.54%
 Buchares            11599.6  11616.8   -0.15%   +18.30
 t                         6        8                 %
 Ljubljan  <.SBITOP  1069.17  1071.25   -0.19%   +18.68
 a         >                                          %
 Zagreb              1944.64  1937.73   +0.36%   +11.81
                                                      %
 Belgrade  <.BELEX1   760.33   758.45   +0.25%   +1.57%
           5>                                   
 Sofia                519.77   519.91   -0.03%   +16.14
                                                      %
                                                       
                     Yield    Yield    Spread   Daily
                     (bid)    change   vs Bund  change
                                                in
 Czech                                          spread
 Republic                                       
   2-year  <CZ2YT=R   0.6060   0.0140   +126bp    +1bps
           R>                                s  
   5-year  <CZ5YT=R   1.4870  -0.0400   +201bp    -3bps
           R>                                s  
           <CZ10YT=   1.7990   0.0020   +193bp    +2bps
 10-year   RR>                               s  
 Poland                                                
   2-year  <PL2YT=R   0.1440  -0.0020   +080bp    +0bps
           R>                                s  
   5-year  <PL5YT=R   1.2740  -0.0550   +179bp    -4bps
           R>                                s  
           <PL10YT=   1.8560  -0.0410   +198bp    -3bps
 10-year   RR>                               s  
           FORWARD                                     
                     3x6      6x9      9x12     3M
                                                interba
                                                nk
 Czech                  0.64     0.96     1.35     0.36
 Rep       <PRIBOR=                             
           >                                    
 Hungary                1.05     1.26     1.46     0.79
                                                
 Poland                 0.36     0.46     0.61     0.21
                                                
 Note:     are for ask                                 
 FRA       prices                               
 quotes                                         
 *********************************************         
 *****************                              
 
 (Reporting by Luiza Ilie in Bucharest, Anita Komuves in
Budapest and Alan Charlish in Warsaw; Editing by Kevin Liffey)
  
 
 
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