CEE MARKETS-Warsaw leads stocks rise, bonds ease as inflation rises
* Higher copper price, company earnings help Polish shares * Bonds ease, Polish 10-year paper leads yield rise * Polish CPI above forecasts, central bankers say no worry (Adds Polish inflation figures, dealer and analyst comments) By Sandor Peto BUDAPEST, Feb 13 Central European stocks mostly firmed on Monday, led by Warsaw's bluechip index which set a 17-month high on the back of higher copper prices and strong company earnings. The regional trend was in line with a global rise in shares due to expectations of economic stimulus in the United States. Prague's main index was at its highest since late 2015. Budapest shares also touched a record high, helped by an 1.1 percent rise in OTP Bank shares, though the 9,000 forint ($31.06) mark, to hit the highest point since 2007. Warsaw's index rose 0.9 percent by 1405 GMT, with copper producer KGHM firming 3.1 percent, after the metal reached 20-month highs in London trade. Power group PGE rose 3.6 percent after reporting strong 2016 earnings. The Polish move extended a rally last week that was driven by banks, due to better than expected bank earnings in the region and comments from the ruling party's head, Jaroslaw Kaczynski. He said on Friday that mortgage-holders who had borrowed in Swiss francs should turn to the courts to seek redress for the pain of increased repayments rather than expect the government to impose a settlement on banks. Regional currencies were mixed and rangebound. "Without any substantial long dollar risk to be unwound, EM (emerging markets) will need an improvement in the narrative around growth and profitability for capital flows to recover and for FX to meaningfully strengthen over the medium term," said Societe Generale analyst Jason Daw in a note. Bucharest stocks eased a third of a percent, giving up some ground after reaching a 19-month high last week. Government bonds mostly eased, tracking other European markets. Poland's 10-year bonds underperformed most European peers, with their yield rising 5 basis points to 3.87 percent. The yield rose a bit further after Poland reported 1.8 percent annual inflation for January, above analysts' 1.6 percent forecasts. Low market liquidity caused the yield rise rather than the data, one Warsaw-based trader said. Central bank rate setters Jerzy Zyzynski and Jerzy Kropiwnicki said the inflation rise was not worrying. Citigroup analyst Eszter Gargyan was expecting a sharp rise in January CPI in Hungary as well, but said in a note the central bank would not "tighten monetary conditions as long the inflation remains within the 2-4 percent target range". Hungary will release inflation figures on Tuesday. Annual inflation picked up to 1.8 percent in December. CEE SNAPS AT 1505 MARKETS HOT CET CURRENCIES Lates Previ Daily Chang t ous e bid close chang in e 2017 Czech crown 27.02 27.02 +0.0 -0.05 00 50 2% % Hungary 308.3 308.2 -0.02 0.17% forint 000 350 % Polish 4.311 4.307 -0.09 2.15% zloty 0 2 % Romanian 4.502 4.499 -0.06 0.72% leu 4 5 % Croatian 7.449 7.455 +0.0 1.42% kuna 0 5 9% Serbian 123.9 123.8 -0.09 -0.51 dinar 800 700 % % Note: daily calculate previ close 1800 change d from ous at CET STOCK S Lates Previ Daily Chang t ous e close chang in e 2017 Prague 969.4 964.3 +0.5 +5.1 4 1 3% 9% Budapest 33327 33156 +0.5 +4.1 .13 .09 2% 4% Warsaw 2174. 2154. +0.9 +11. 68 79 2% 64% Bucharest 7642. 7668. -0.34 +7.8 41 55 % 7% Ljubljana 760.9 755.4 +0.7 +6.0 6 9 2% 4% Zagreb 2155. 2163. -0.35 +8.0 48 03 % 5% Belgrade 2 8 3% % Sofia 605.1 604.4 +0.1 +3.1 5 7 1% 9% BONDS Yield Yield Sprea Daily d (bid) chang vs chang e Bund e in Czech sprea Republic d 2-year 5 9 bps 5-year 1 bps 10-year 8 bps Poland 2-year bps s 5-year bps s 10-year bps s FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M inter bank Czech Rep < 0.26 0.26 0.3 0 PRIBOR=> Hungary < 0.35 0.5 0.63 0.24 BUBOR=> Poland < 1.77 1.81 1.895 1.73 WIBOR=> Note: FRA are for quotes ask prices ************************************************** ************ ($1 = 289.7500 forints) (Additional reporting by Bartosz Chmielewski in Warsaw; Editing by Alison Williams)