OREANDA-NEWS. February 12, 2015. Central European assets fell on Wednesday before talks on Ukraine and a meeting of euro zone finance ministers to discuss Greek claims for a new deal on its debt.

Hungary's forint also suffered after data showed the country's consumer price index fell an annual 1.4 percent in January, more than the 1.2 percent forecast by analysts, as the cost of fuel and household energy dropped.

The figures fuelled expectations that Hungary's central bank would cut interest rates in March and other central banks would also ease policy as prices continue to fall.

Government bond prices in the region rose at first but gave up their gains amid worries over the talks on Ukraine and Greece. Hungarian bond yields fell around 5 basis points, then rose 10 to 15 basis points. Ten-year bonds were trading at 3.2 percent at 1345 GMT, up 6 basis points from Tuesday's fixing.

"Currencies in emerging markets also eased ... money flowed into safe bonds like the US, Germany and Switzerland," one Budapest-based dealer said. Bonds in the safe, low-yield Czech market also decoupled from the Central European region, he said.

The Czech Republic's first bond auction in four months met strong investor demand, even at yields that have been driven to record lows during its absence from the market.

The region's most liquid currency, the zloty, was worst hit by the risk aversion. It eased half a percent to 4.222 against the euro. The forint and the leu shed 0.4 percent and the Czech crown weakened only a shade.

"It is good ... that the forint did not underperform even though the morning inflation figure is a handicap," one Budapest-based dealer said. A solution to Ukraine's problems at the talks in Minsk could help the region's assets, he said.

"Investors are in a wait-and-see stance and trading is nervous," the dealer said.

Leaders of Ukraine, Russia, Germany and France are due to meet in Minsk to discuss, where government forces and Russian-backed rebels continue to fight. The crisis has damaged the economies of some of Ukraine's neighbours.

Greece also remains a risk. Commerzbank said in a note that Turkey, Romania and Bulgaria were the emerging economies with the most direct links with Athens, with Greek banks present in their financial sectors.

"However, Bulgaria, followed by Macedonia and Albania are the most exposed to Greece, relative to the size of their economy and total exports," it said, adding that it cut its recommendations for Romania's local currency bonds and Turkish eurobonds to "market weight" from "overweight".