News

BUDAPEST, March 20 (Reuters) - The Czech crown slipped on Wednesday ahead of a central bank meeting later in the day where rate setters are expected to maintain the bank's easing pace as inflation has returned to the target range.

The crown EURCZK= was 0.11% lower on the day, trading at 25.29 per euro ahead of the decision of the Czech National Bank where a Reuters poll of analysts expects another 50 basis points rate cut.

While inflation is back on target, some prices are still rising quickly and the crown has traded weaker than expected this quarter, creating caution among central bankers.

"Following a good inflation print for February, speculation had mounted regarding a possible 75bp rate cut – this immediately triggered koruna weakness," Commerzbank wrote in a note.

The speculation "prompted CNB board members to emphasise ... that they would only support 25bp or 50bp rate cuts. Despite such verbal intervention, the koruna looks barely stable with a clear weakening bias," they added.

The Czech crown and Hungarian forint have fallen this year as their central banks cut rates in a continuing easing cycle.

Elsewhere, market participants were eyeing the results of the meeting of the U.S. Federal Reserve, analysts said.

The Hungarian forint EURHUF= was a touch lower on the day, trading at 395.05 versus the euro.

The Polish zloty EURPLN= edged down and was trading 0.06% weaker on the day at 4.3180 per euro, unfazed by Prime Minister Donald Tusk's announcement on Tuesday that a motion to bring the central bank chief before a state tribunal was ready.

Tusk's government accuses central bank governor Adam Glapinski of having been insufficiently independent of political pressure and of potentially having broken constitutional rules, charges he denies.

"Markets seem to have fully got used to headlines of this nature and weaker PLN levels in recent days may thus be an attractive entry level since this risk is off the table for this week," ING wrote in a note.

"EUR/PLN has broken away from rates significantly and we think this gap will be closed by a move back to 4.300 in the coming days," they added.

Most stocks in the region were higher, with Warsaw .WIG20 bucking the trend and losing 0.7% on the day.

CEE MARKETS

SNAPSHOT

AT 1005 CET

CURRENCIES

in 2024

EURCZK=

Czech crown

EURCZK=

25.2900

EURHUF=

Hungary forint

EURHUF=

EURPLN=

Polish zloty

EURPLN=

EURRON=

Romanian leu

EURRON=

EURRSD=

Serbian dinar

EURRSD=

117.1000

117.2350

Note: daily change

calculated from

1800 CET

in 2024

.PX

.PX

1496.21

1495.4400

.BUX

.BUX

66107.39

65933.87

.WIG20

2319.45

2335.74

.BETI

.BETI

16454.01

16369.18

vs Bund

change in

CZ2YT=RR

2-year

3.7020

-0.0270

+084bps

-1bps

CZ5YT=RR

5-year

3.7180

-0.0030

+130bps

+3bps

CZ10YT=RR

10-year

CZ10YT=RR

3.9070

0.0030

+150bps

+4bps

PL2YT=RR

2-year

PL2YT=RR

5.1630

-0.0040

+230bps

+2bps

PL5YT=RR

5-year

PL5YT=RR

5.3380

-0.0330

+292bps

+0bps

PL10YT=RR

10-year

PL10YT=RR

5.4610

-0.0360

+305bps

+0bps

FORWARD

3x6

6x9

9x12

3M interbank

CZKFRAPRIBOR=

HUFFRABUBOR=

PLNFRAWIBOR=

Note: FRA quotes

are for ask prices

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

(Additional reporting by Jason Hovet in Prague and Anna Wlodarczak-Semczuk in Warsaw; Editing by Ros Russell)

((komuves.anita@thomsonreuters.com)(+36 70 795 8815))

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