CEE MARKETS-Hungarian growth gives forint only minor uplift

    * CEE growth slows despite Hungarian strength
    * Hungarian growth at fastest for 15 years
    * Stronger dollar keeps lid on CEE assets
    * Romanian stocks give up early gains

    By Sandor Peto
    BUDAPEST, Feb 14 (Reuters) - The forint and the Czech crown
firmed slightly on Thursday amid some expectations for monetary
policy tightening while a pick-up in Hungary's economic growth
bucked Central Europe's slowdown.
    Czech and Hungarian inflation figures released earlier
surprised on the upside, adding arguments to expectations that
the Hungarian central bank will start monetary tightening soon
and its Czech counterpart will continue its own tightening.
    The crown and forint firmed a touch
against the euro by 0940 GMT, while the Romanian leu
and Polish zloty eased slightly.
    The dollar's firming to a three-month high against
the euro kept a lid on Central European asset prices, which are
vulnerable to a decline in risk appetite often reflected in
dollar buying.  
    Fourth-quarter economic output data from Poland, Romania and
Slovakia showed slower but still robust annual growth that is
outpacing euro zone economies. Poland led the trio with a 4.9
percent expansion.
    Hungary's growth is even faster, picking up to 5 percent,
its strongest since 2004, when the region's states joined the
European Union.
    The economy has become much more balanced since then, with
the budget deficit and state debt declining and the country
posting current account surpluses.
    
    RATINGS EXPECTATIONS
    Finance minister Gabor Gion cooled expectations for a rating
upgrade from Standard & Poor's late on Wednesday, saying after
meeting representatives of ratings agencies that Hungary would
cut its debt slower than agencies have called for.
    The forint firmed moderately after the GDP figures but,
peaking at 318.52 against the euro, stayed closer to the weak
end of the past four weeks' 315-320 range.
    "The market is beginning to understand that the central bank
will not rush into tightening. It is a slow process," one
Budapest currency dealer said.
    The bank will need to balance its policy between growing
domestic inflation worries and a less hawkish stance from the
U.S. Federal Reserve and European Central Bank, one fixed-income
trader said.
    Regional equities moved little as investors kept an eye on
U.S.-China trade talks.
    Bucharest stocks gave up most of the ground gained
early in the session after senate speaker Calin Tariceanu said
on Wednesday that the government could scrap a 2 percent tax on
energy companies' turnover.
    This year's tax increases, including a tax on bank assets to
finance wage rises and other spending, have been widely
criticised by industry and the central bank.
    Romania's economic output data showed a slowdown in annual
growth to 4.1 percent in the fourth quarter from 4.4 in the
third quarter, underpinning worries that the draft 2019 budget
was based on overly optimistic revenue assumptions. 
    
            CEE       SNAPSHOT   AT                         
            MARKETS             1040 CET            
                      CURRENCI                              
                      ES                            
                      Latest    Previous  Daily     Change
                      bid       close     change    in 2019
 Czech      <EURCZK=   25.7760   25.7940    +0.07%    -0.27%
 crown      >                                       
 Hungary    <EURHUF=  318.8000  319.0700    +0.08%    +0.72%
 forint     >                                       
 Polish     <EURPLN=    4.3385    4.3366    -0.04%    -1.13%
 zloty      >                                       
 Romanian   <EURRON=    4.7440    4.7421    -0.04%    -1.90%
 leu        >                                       
 Croatian   <EURHRK=    7.4060    7.4060    +0.00%    +0.05%
 kuna       >                                       
 Serbian    <EURRSD=  118.0300  118.1400    +0.09%    +0.23%
 dinar      >                                       
 Note:      calculated from               1800 CET          
 daily                                              
 change                                             
                                                            
                      Latest    Previous  Daily     Change
                                close     change    in 2019
 Prague                1056.94  1058.060    -0.11%    +7.13%
                                       0            
 Budapest             40140.06  40221.18    -0.20%    +2.56%
 Warsaw                2337.78   2346.39    -0.37%    +2.69%
 Bucharest             7680.75   7678.92    +0.02%    +4.02%
 Ljubljana  <.SBITOP    831.48    831.34    +0.02%    +3.38%
            >                                       
 Zagreb                1758.02   1755.28    +0.16%    +0.53%
 Belgrade   <.BELEX1    701.09    702.19    -0.16%    -7.96%
            5>                                      
 Sofia                  577.54    573.94    +0.63%    -2.85%
                      BONDS                                 
                      Yield     Yield     Spread    Daily
                      (bid)     change    vs Bund   change
                                                    in
 Czech                                              spread
 Republic                                           
   2-year   <CZ2YT=R    1.7920    0.0150   +236bps     +2bps
            R>                                      
   5-year   <CZ5YT=R    1.7160    0.0550   +210bps     +7bps
            R>                                      
   10-year  <CZ10YT=    1.7590    0.0050   +165bps     +2bps
            RR>                                     
 Poland                                                     
   2-year   <PL2YT=R    1.5510   -0.1010   +212bps    -10bps
            R>                                      
   5-year   <PL5YT=R    2.1730   -0.0030   +256bps     +1bps
            R>                                      
   10-year  <PL10YT=    2.7200   -0.0020   +261bps     +1bps
            RR>                                     
            FORWARD   RATE      AGREEMEN                    
                                T                   
                      3x6       6x9       9x12      3M
                                                    interban
                                                    k
 Czech Rep                2.08      2.11      2.13      1.99
            <PRIBOR=                                
            >                                       
 Hungary                  0.37      0.59      0.81      0.15
                                                    
 Poland                   1.73      1.72      1.72      1.72
                                                    
 Note: FRA  are for ask prices                              
 quotes                                             
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 (Reporting by Sandor Peto
Editing by David Goodman)
  
 
 

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