CEE MARKETS-Forint leads region higher as investors eye cenbank meeting

       By Krisztina Than
       BUDAPEST, March 28 (Reuters) - The Hungarian forint led
Central European currencies higher on Tuesday, ahead of the
central bank's rate meeting where it is expected to leave
interest rates unchanged at the EU's highest level, amid
stubbornly high inflation and fast wage growth.
    The forint was up 0.7%, as of 0900 GMT, to 384.35
to the euro, still stuck in a range between 383 and 390.
    "If the Hungarian central bank highlights uncertainties
about (global) financial stability, the forint may strengthen
somewhat, as high interest rates may persist for a long time,"
brokerage Equilor said in a note.
    "While previously we thought that the NBH could begin to
ease its one-day deposit rate (18%) as early as the upcoming
March MPC meeting, the deteriorating market sentiment more
likely implies that the central bank will leave policy unchanged
in the near-term," Goldman Sachs analysts said in a note.
    Hungary's annual inflation slowed marginally in February to
25.4%, while wage growth remains robust, posing upside risks to
inflation, according to data published on Tuesday.
    Tight labour markets and strong wage growth are a pain point
for central bankers across the region and is expected to
translate into interest rates remaining high for longer.
        "Despite better news on headline, high inflation remains
the key policy concern," Goldman Sachs said.
    It added that while headline inflation rates are expected to
fall sharply across the CEE in March and April, partly due to
unusually large base effects "the outlook for core inflation
remains worrying, owing to the combination of rapid wage growth
and high inflation expectations."
    The Czech crown was flat ahead of Wednesday's rate
meeting, at around 23.743 versus the euro.
    "We do not expect a change to rates or the intervention
pledge," CSOB said, referring to a commitment to intervene to
prevent significant weakening the central bank has had in place
since last May.
    "We actually see a chance of a light hawkish surprise."
    Analysts in a Reuters poll pared back rate cut views in both
Hungary and the Czech Republic.
    The Polish zloty, which has missed out on gains
seen by the forint and crown so far this year, edged 0.2% higher
to 4.682 per euro.
    "This week the zloty will probably be the most stable, but
also the weakest currency in the region. We expect EUR/PLN to
stay close to current levels. The zloty remains unattractive for
short-term investors who still prefer to take positions in other
CEE currencies," ING said in a note.
    "Pessimism about the short-term prospects of the Polish
economy will probably persist, supporting expectations for a
quick easing of the NBP's policy."
                   CEE      SNAPSHO   AT
                   MARKETS  T        1003
                                     CET
                            CURRENC
                            IES
                            Latest   Previou  Daily    Change
                                     s
                            bid      close    change   in 2023
 EURCZK  Czech     EURHUF  Hungary   0        0
 EURPLN  Polish    EURRON  Romanian  EURHRK  Croatian  EURRSD  Serbian   0        0
         Note:     calculated from            1800
         daily                                CET
         change

                            Latest   Previou  Daily    Change
                                     s
                                     close    change   in 2023
 .PX     Prague             1311.41  1298.42   +1.00%   +9.13%
                                          00
 .BUX    Budapest           42397.7  42096.7   +0.72%   -3.19%
                                  5        2
 .WIG20  Warsaw    .BETI   Buchares           12130.3  12095.6   +0.29%   +4.00%
         t                        7        3
 .SBITO  Ljubljan  %
 .CRBEX  Zagreb    5%
 .BELEX  Belgrade  .SOFIX  Sofia     Yield    Yield    Spread   Daily
                            (bid)    change   vs Bund  change
                                                       in
         Czech                                         spread
         Republic
 CZ2YT=    2-year  s
 CZ5YT=    5-year  s
 CZ10YT            s
         Poland
 PL2YT=    2-year  s
 PL5YT=    5-year  s
 PL10YT            s
                   FORWARD
                            3x6      6x9      9x12     3M
                                                       interba
                                                       nk
         Czech     Hungary   Poland    Note:     are for ask
         FRA       prices
         quotes
         ********************************************
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 (Reporting by Jason Hovet in Prague, Krisztina Than in
Budapest, and Karol Badohal in Warsaw; Editing by Sonia Cheema)