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CEE MARKETS-Hungary shines as emerging markets' rise lifts east Europe

BUDAPEST, July 17 (Reuters) - The Hungarian blue chip stock index reached new all-time highs on Monday as emerging European indices rose, bouyed by cautious U.S. rate policy and Chinese growth. The BUX topped 36,000 points and was up by a third in past year as its major stocks all rose. OTP Bank was close to a 10-year high at 9,633 forints and MOL near a 6-year high at 22,085 forints. Federal Reserve Chair Janet Yellen indicated on Wednesday that the Fed's rate hikes could be gradual rather than fast. That has increased risk appetite in global markets and also in the European Union's eastern members. Other Eastern European stock indices also rose as MSCI's emerging market index was up 0.4 percent in early trading, setting new two-year highs. In what was taken as another positive sign for emerging markets in eastern Europe, China's economy grew faster than expected in the second quarter though analysts expect slower growth over the rest of the year. "The mood is positive everywhere, even emerging markets like Turkey or Mexico turned positive after recent slumps," a dealer said in Budapest. He added that the forint, which bucked a recent emerging market weakening trend and behaved like a safe-haven unit, added yet more with the current upswing and traded at 306.40, near a one-month high but also just one percent off a two-year high. The forint was especially under upward pressure in the dollar cross. The euro cross mostly tracked the HUF/USD pair, which could appreciate by as much as two percent in the near future, the dealer said. That outlook could engage the National Bank of Hungary (NBH), which is expected to hold fire at a rate-setting meeting on Tuesday but which has used unconventional tools to keep the forint's gains at bay. The NBH, Central Europe's most dovish central bank, may loosen monetary conditions further through measures lifting liquidity in forint markets despite likely tightening by other central banks, analysts said last week.

CEE MARKETS SNAPSH AT 1014 CET

OT CURRENCIES

Latest Previo Daily Change

us

bid close change in

2017

Czech crown 26.103 26.070 -0.13% 3.46% 0 0 Hungary 306.20 305.91 -0.09% 0.86% forint 00 00 Polish zloty 4.2088 4.2038 -0.12% 4.64% Romanian leu 4.5620 4.5625 +0.01 -0.59%

%

Croatian 7.4100 7.4072 -0.04% 1.96%

kuna

Serbian 120.04 120.19 +0.12 2.76% dinar 00 00 % Note: daily calculated previo close 1800 change from us at CET

STOCKS

Latest Previo Daily Change

us

close change in

2017

Prague 1005.6 1000.5 +0.51 +9.12 2 4 % % Budapest 36118. 35915. +0.56 +12.8 34 42 % 6% Warsaw 2373.3 2350.4 +0.98 +21.8 6 3 % 4% Bucharest 8213.2 8132.7 +0.99 +15.9 1 3 % 2% Ljubljana 808.15 812.45 -0.53% +12.6

2%

Zagreb 1857.0 1858.6 -0.09% -6.91% 5 3 Belgrade 714.03 715.05 -0.14% -0.47% Sofia 710.48 713.10 -0.37% +21.1

5% BONDS

Yield Yield Spread Daily (bid) change vs change Bund in Czech spread

Republic

2-year -0.1 0.05 +052b +7bps

ps

5-year 0.078 0 +018b +1bps

ps

10-year 0.991 0.029 +040b +4bps

ps Poland

2-year 1.832 -0.087 +246b -7bps

ps

5-year 2.669 -0.005 +277b +0bps

ps

10-year 3.308 0.006 +272b +1bps

ps

FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M

interb ank

Czech Rep <PR 0.43 0.52 0.6 0

IBOR=>

Hungary <BU 0.21 0.23 0.285 0.15

BOR=>

Poland <WI 1.752 1.777 1.818 1.73

BOR=>

Note: FRA are for ask quotes prices ********************************************************* ****

(Reporting by Marton Dunai; Editing by Andrew Heavens)