BUDAPEST: Polish government bond yields dropped on Wednesday, bucking a rise in euro zone yields, after the finance ministry said on Tuesday that it would not sell bonds in August, apart from a switch tender.
The yield on Poland's 10-year government bonds was bid lower by 5 basis points at 3.14 percent. The corresponding Bund yield was up 3 basis points at 0.47 percent
Yields in the euro zone and Central Europe mostly rose, driven by a jump in Japan's 10-year yield after Bank of Japan Governor Haruhiko Kuroda said yields would be allowed to move more flexibly.
Czech and Hungarian 10-year yields rose 1 to 2 basis points. Czech five- and two-year yields rose 6 to 7 basis points.
The Czech central bank is expected to raise interest rates for the fifth time since August 2017 at its meeting on Thursday, to fight a pick-up in inflation and create room in its interest rates in case of a possible economic slowdown.
The region's economies have been growing robustly, at rates around 4 percent.
July PMI manufacturing sentiment indices released on Wednesday showed some slowdown in economic activity in the Czech Republic and Poland.
The figures did not change expectations for Czech rate hikes to come and for continued loose monetary policy in Poland, which reported 2 percent annual inflation for July on Tuesday, well within the central bank's 1.5 to 3.5 percent target range.
The Czech crown remained stuck near 25.6 to the euro. The forint retreated from Wednesday's seven-week lows, to trade at 321.24, weaker by 0.3 percent.
In slow holiday-time trading in the region, the forint is unlikely to strengthen past the 320 line or weaken beyond 323 in the next days, one Budapest-based currency dealer said.
"It is moved by the euro/dollar cross now, weakening as the dollar has firmed," the dealer added.
Regional currencies rebounded in the past weeks from months of weakening caused by flows into the dollar, which rallied in the second quarter.
Wednesday's slightly more negative global sentiment, also marred by global trade war fears, may mean that yields will rise 1 to 2 basis points at Hungary's bond auctions on Thursday relative to the current secondary market levels, one fixed income trader said.
Hungary's 10-year bonds trade at yields around 3.24 percent.
The region's equity indices were mixed, with their daily change not exceeding a third of a percent.
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