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CEE MARKETS-Assets tread water as investors eye ECB

BUDAPEST, July 20 (Reuters) - Emerging European assets mostly trod water on Thursday morning before the European Central Bank's meeting, amid light trading. The European Central Bank is expected to leave interest rates and QE policy unchanged, but president Mario Draghi could give more details on how the central bank plans to gradually unwind its bond buying stimulus. "Markets are keeping their eyes peeled for any sign of Draghi comments on an end of the easing cycle, and any slight change could move the major crosses, affecting emerging European assets as well, but I would not bank on major moves," a dealer said in Budapest. Stocks rose slightly, lifted by sustained investor interest in emerging markets, built on recent cautious remarks from the Federal Reserve which signaled more opportunity in higher yielding assets elsewhere. Polish stocks added a third of a percent, with Hungarian and Romanian stocks rising by a quarter of a percent. Other stock indices were little changed. The forint hovered near an eight-month high despite sustained rhetoric by the National Bank of Hungary about using unconventional easing tools on top of record low interest rates if necessary to keep the unit at bay. The bank kept interest rates unchanged as expected on Tuesday, with any price pressures from strong economic growth seen as unlikely to lift inflation beyond its 3 percent target level this year or next. The crown was flat just north of the 26 level to the euro even as Czech producer prices dropped more than expected on a monthly basis, posting their biggest decline in more than a year. On Wednesday the unit had touched its strongest level since the central bank abandoned its exchange rate cap regime earlier this year. In Poland, political clouds gathered as the European Union gave Warsaw a week to halt divisive judicial reforms or face punishment for undermining democracy.

CEE MARKETS SNAPSH AT 0926 CET

OT CURRENCIES

Latest Previo Daily Change

us

bid close change in

2017

Czech crown 26.064 26.081 +0.07 3.62% 0 5 % Hungary 305.90 305.97 +0.02 0.95% forint 00 00 % Polish zloty 4.2129 4.2113 -0.04% 4.53% Romanian leu 4.5670 4.5700 +0.07 -0.70%

%

Croatian 7.4110 7.4155 +0.06 1.94% kuna % Serbian 120.57 120.67 +0.08 2.31% 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 1008.5 1007.9 +0.06 +9.43 6 2 % % Budapest 35869. 35789. +0.23 +12.0 90 28 % 8% Warsaw 2382.2 2374.3 +0.34 +22.3 7 1 % 0% Bucharest 8289.9 8268.7 +0.26 +17.0 7 7 % 1% Ljubljana 800.22 801.03 -0.10% +11.5

1%

Zagreb 0.00 1859.0 +0.00 -100.0 3 % 0% Belgrade 0.00 709.27 +0.00 -100.0 % 0% Sofia 711.94 710.78 +0.16 +21.4 % 0%

BONDS

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

Republic

2-year 0 0.2 +063b +19bp ps s 5-year 0.068 0.037 +019b +3bps

ps

10-year 0.918 0 +037b -1bps

ps Poland

2-year 1.844 -0.005 +248b -1bps

ps

5-year 2.666 -0.004 +279b -1bps

ps

10-year 3.296 0.016 +275b +0bps

ps

FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M

interb ank

Czech Rep <PR 0.48 0.6 0.69 0

IBOR=>

Hungary <BU 0.2 0.24 0.31 0.15

BOR=>

Poland <WI 1.755 1.779 1.825 1.73

BOR=>

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

(Reporting by Marton Dunai; Editing by Andrew Heavens)