BUDAPEST: Central European government bond yields rose slightly on Thursday, tracking euro zone and US peers that were driven by a surge in crude prices which may lead to more inflation.
Hungary's 10-year bond yield rose by 3 basis points to 2.46 percent and the corresponding Czech yield was also a touch higher. Poland's 10-year yield was steady, after a rise early this week, but its shorter yields also rose slightly.
Inflation figures have been mild in most of the region so far this year despite a surge in wages and consumption, with imported inflation remaining moderate.
March Polish data released on Thursday showed a bigger-than-expected slowdown in annual industrial output growth, while the producer price index was slightly higher than expected.
Warsaw-listed shares in the financial sector, which can benefit from higher inflation, firmed, driving a 0.7 percent rise in the bourse's bluechip index to a 5-week high.
The rise, however, was attributed by a trader and an analyst to the regional trend of recovery from a decline in share prices in February and March.
The Polish central bank (NBP) lowered its inflation forecasts earlier this year and its Governor Glapinski reiterated that interest rates could stay unchanged at record lows for years.
Economic output growth is seen remaining strong in Poland and across the region.
"We expect (Polish) GDP growth to land at 4.2 percent this year amid limited inflationary pressure that supports stability of (NBP) rates scenario," Erste analyst Katarzyna Rzentarzewska said in a note after the Polish figures were released.
Currencies did not show signs of expectations for a shift towards more hawkish monetary policies in the region either.
Central Europe's main four units -- the Czech crown , the forint, the leu and the zloty -- eased slightly, by less than 0.1 percent against the euro, drifting off the 2-month highs they reached in the past days.
The zloty failed to benefit from comments from a Standard & Poor's analyst who said the agency may raise Poland's credit rating if the fiscal deficit remains around 2 percent of economic output.
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