CEE MARKETS-Polish 10-year yield highest since 2014 as inflation surges

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By Alan Charlish Jan 7 (Reuters) – The Polish 10-year bond yield crossed the 4% mark for the first time since 2014 on Friday, as a surge in inflation builds expectations of further policy tightening in the largest economy in the European Union’s eastern wing. Poland’s central bank hiked its main interest rate by 50 basis points to 2.25% on Tuesday and signalled there was more tightening to come, a view reinforced on Friday by data showing the consumer price index hit a more than two-decade high of 8.6% in December. “The way the market sees it is that we are pricing in a scenario in which interest rates in Poland reach 4% promptly … and remain at elevated levels for many years,” said said Piotr Bartkiewicz, an economist at Pekao in Warsaw. The Polish 10-year yield was up almost 14 basis points at 4.042% by 1156 GMT. But the Polish zloty was little changed, with analysts saying that expectations for further tightening have been largely priced in….

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