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CEE MARKETS-Prague shares hit seven-week high, forint firmer

PRAGUE, July 18 (Reuters) - Prague stocks rose to a seven-week high on Tuesday to lead central Europe after a tender offer lifted shares of artificial textile maker Pegas Nonwovens , while Hungary's forint firmed a touch before a central bank meeting. The Hungarian central bank, the most dovish in the region, was expected to leave interest rates at record lows and analysts say it may not tighten policy until 2019. But like other central European and emerging markets currencies, the forint has benefited from a weaker dollar, and was trading just off a one-month high on Tuesday. It was bid at 306.45 to the euro at 0918 GMT. Some analysts said there was a chance recent inflation data might cause Hungarian central bankers to rethink their approach, though others did not expect a change in the bank's rhetoric. Monika Kiss at brokerage Equilor said in a note that she did not expect the statement to contain significant new elements after the bank last month pushed out the date when it expects inflation to reach its target in a sustained way. "The current loose monetary policy can remain for a longer time than previously anticipated probably there won't be a rate hike next year either," Kiss said. Hungarian headline inflation slowed to an annual 1.9 percent in June from 2.1 percent in May, and was below analyst forecasts for 2 percent in a Reuters poll. Other currencies were mixed, with the Polish zloty steady and the Czech crown edging down less than 0.1 percent. The Romanian leu inched up. Romanian Prime Minister Mihai Tudose said on Monday his leftist-led government had scrapped a plan to tax companies' turnover, helping the leu. But other tax changes are still on the table and uncertainty is weighing on assets. Bucharest stocks added 0.5 percent on Tuesday. Prague was the big gainer, rising 0.6 percent on the back of an 8 percent jump in Pegas. Czech investment group R2G launched an offer to buy the group, although analysts said the bid might not be high enough.

CEE SNAPSHOT AT 1118 CET

MARKETS CURRENCIES

Latest Previous Daily Change bid close change in 2017 Czech crown 26.0720 26.0625 -0.04% 3.59% Hungary 306.4500 307.0100 +0.18% 0.77%

forint

Polish 4.2030 4.2038 +0.02% 4.78%

zloty

Romanian 4.5605 4.5617 +0.03% -0.56%

leu

Croatian 7.4150 7.4115 -0.05% 1.89%

kuna

Serbian 120.3500 120.3500 +0.00% 2.49%

dinar

Note: daily calculate previous close at 1800 change d from CET

STOCKS

Latest Previous Daily Change close change in 2017 Prague 1011.45 1005.36 +0.61% +9.75% Budapest 36056.41 36140.65 -0.23% +12.67% Warsaw 2375.60 2372.17 +0.14% +21.96% Bucharest 8196.37 8155.34 +0.50% +15.69% Ljubljana 796.94 803.27 -0.79% +11.06% Zagreb 1852.36 1853.82 -0.08% -7.14% Belgrade <.BELEX15 710.27 713.09 -0.40% -0.99% > Sofia 708.01 710.93 -0.41% +20.73%

BONDS

Yield Yield Spread Daily (bid) change vs Bund change

in

Czech spread

Republic

2-year <CZ2YT=RR -0.125 0.025 +050bp +2bps > s 5-year <CZ5YT=RR 0.076 0 +019bp +0bps > s 10-year <CZ10YT=R 0.911 0 +035bp +2bps R> s

Poland

2-year <PL2YT=RR 1.821 -0.006 +244bp -1bps > s 5-year <PL5YT=RR 2.653 -0.019 +277bp -2bps > s 10-year <PL10YT=R 3.275 -0.013 +271bp +1bps R> s FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M

interban k

Czech Rep < 0.45 0.53 0.61 0

PRIBOR=>

Hungary < 0.21 0.23 0.29 0.15

BUBOR=>

Poland < 1.753 1.777 1.819 1.73

WIBOR=>

Note: FRA are for quotes ask

prices

(Reporting by Jason Hovet in PRAGUE, Luiza Ilie in BUCHAREST, and Krisztina Than in BUDAPEST; Editing by Catherine Evans)