CEE MARKETS-Crown softer, Czechs may deliver first EU rate hike for years

* Crown eases, but off one-month low as central bank meets

* Czech bank seen lifting rates now, or in September

* Hungarian bond auctions seen daring solid demand-trader

* Polish president's fx bill pushes bank stocks lower

BUDAPEST/PRAGUE, Aug 3 (Reuters) - The crown eased slightly on Thursday ahead of a meeting where the Czechs may deliver the European Union's first central bank interest rate hike for several years. The crown traded at 26.115 against the euro at 0815 GMT, weaker from Wednesday but off Tuesday's one-month lows of 26.172, while other Central European currencies were mixed. Czech policymakers may deliver their first rate hike since 2008, and become the first EU central bank to embark on a new tightening cycle in more than five years. A growing economy and signs of inflation will trigger a rate rise unless concerns prevail that a bigger premium over euro zone rates would attract too much hot capital inflow. A Reuters poll showed last week the bank was likely to raise rates this quarter, with half of all analysts expecting policymakers to move as soon as Thursday. Doubters of a hike so soon say the crown has firmed a good clip since being set free from a currency cap of 27/euro in April after three years of being kept artificially weak, and its strengthening has tightened monetary conditions enough. Uncertainty over how soon the European Central Bank will drop its own ultra-loose policy of bond purchases may also cause the Czechs to pause for now. "I think the CNB is going to vote (on a hike proposal) and (the count) might be close. I would be surprised though if it hikes," a fixed income trader said. Czech bonds were bid a touch up, but have held up because of continuing good demand from investors with euros able to still get cheap crown financing and make profits parking money in debt markets despite low yields. Bonds in Hungary, which have much higher yields than Czechs, were flat and solid demand is expected at an auction on Thursday, one Budapest-based trader said. "The forint is also strong (near 26-month highs against the euro), and people wonder if the central bank will do something to weaken it," he said. A Reuters poll of analysts showed stronger than expected courses for the region's currencies for the next 12 months, with Europe's economic growth powering ahead. The Serbian central bank has repeatedly intervened against its currency in the market this year, but the dinar reached a new 22-month low on Thursday. Regional equities markets were quiet. Polish bank stocks mostly eased slightly after President Andrzej Duda submitted a draft bill to help troubled foreign currency borrowers that would cost lenders up to about 3.2 billion zlotys ($890 million) per year.



Latest Previo Daily Change


bid close change in


Czech crown 26.115 26.103 -0.05% 3.42% 0 0 Hungary 303.36 303.59 +0.08 1.80% forint 00 50 % Polish zloty 4.2560 4.2576 +0.04 3.48%


Romanian leu 4.5630 4.5616 -0.03% -0.61% Croatian 7.4065 7.4065 +0.00 2.01% kuna % Serbian 119.49 119.70 +0.18 3.23% dinar 00 00 % Note: daily calculated previo close 1800 change from us at CET


Latest Previo Daily Change


close change in


Prague 1014.0 1010.5 +0.34 +10.0 6 9 % 3% Budapest 36039. 36041. +0.00 +12.6 48 13 % 1% Warsaw 2362.1 2366.0 -0.16% +21.2 7 6 7% Bucharest 8310.4 8299.2 +0.14 +17.3 7 2 % 0% Ljubljana 804.34 809.85 -0.68% +12.0


Zagreb 1886.0 1886.1 -0.01% -5.46% 1 3 Belgrade 706.55 707.17 -0.09% -1.51% Sofia 719.92 715.14 +0.67 +22.7 % 6%


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


2-year -0.026 -0.026 +066b -4bps


5-year 0.122 0 +034b -1bps


10-year 0.898 0 +041b -1bps

ps Poland

2-year 1.832 0.014 +252b +1bps


5-year 2.699 0.001 +291b -1bps


10-year 3.362 0.003 +287b +0bps



interb ank

Czech Rep <PR 0.55 0.67 0.77 0


Hungary <BU 0.2 0.28 0.31 0.15


Poland <WI 1.767 1.8 1.87 1.73


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

(Additional reporting by Bartosz Chmielewski in Warsaw)