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CEE MARKETS-Crown retreats as cbank seen turning dovish after rate rise

* Czech central bank's post-hike comments were dovish-analysts

* Czech crown gives up almost all of post-rate-hike gains

* Loose ECB policy discourages monetary tightening-analysts

* Romanian central bank seen holding fire, may hike next year

* MOL shares hit 6-year high after strong Q2 results

BUDAPEST/PRAGUE, Aug 4 (Reuters) - The crown retreated on Friday due to doubts that Thursday's Czech central bank (CNB) interest rate hike would be followed by further tightening. The crown had shed 0.13 percent to 26.075 against the euro by 0944 GMT, approaching the levels it hit before the rate hike. On Thursday, the rate increase boosted the currency to 25.9, its strongest since April when the CNB removed a cap that had kept it weaker than 27 against the euro since 2013. The hike was the first in the Czech Republic in over nine years and the first among European Union member states in more than five years. Other central banks in Central Europe, under less pressure from recent inflation figures, remain dovish and are unlikely to follow the Czech example this year, including the Romanian bank, which meets on Friday. The CNB lifted its two-week repo rate by 20 basis points to 0.25 percent on Thursday. Inflation is above its 2 percent target, the Czech labor market is the tightest in the EU, and the economy is seen growing at annual rates above 3 percent, in line with the region. But the Czech inflation rate is seen dipping below 2 percent again. The bank's new outlook is more dovish than before and it also fears hot money inflows if European Central Bank policies remain loose, making Czech assets attractive, analysts said. "If the ECB postpones its first tightening, the CNB will have no other option than to be patient too," Ceska Sporitelna analysts said. The CNB's press conference on Thursday changed the outlook, Komercni Banka dealer Dalimil Vyskovsky said, "pointing to somewhat slower hikes from now on." "Apparently the bank (is) trying to sound as dovish as possible, once again, in our view the reason behind it being fears of EURCZK reaction getting too strong," he added. The key 3-month Prague inter-bank offered rate (PRIBOR was fixed at 42 basis points, up 11 basis points. The leu traded a shade firmer ahead of the Romanian central bank's meeting. The bank is unlikely to lift its rates this year, but is expected to narrow the corridor between its lending and deposit facility later this year, tightening conditions. Next year it could start to reverse its rate cuts, because inflation could jump close to the top of its 1.5-3.5 percent target range, analysts have said. The Polish central bank may also start considering rate hikes next year, and Hungary in 2019, analysts have said.

Stock markets rose in the region, with Budapest leading gains on a surge in MOL shares to a 6-year high after the oil and gas group posted better than expected earnings, and raised its earnings outlook for 2017.

CEE MARKETS SNAPSH AT 1043 CET

OT CURRENCIES

Latest Previo Daily Change

us

bid close change in

2017

Czech crown 26.079 26.041 -0.15% 3.56% 0 0 Hungary 304.10 303.90 -0.06% 1.55% forint 00 50 Polish zloty 4.2422 4.2447 +0.06 3.81%

%

Romanian leu 4.5610 4.5631 +0.05 -0.57%

%

Croatian 7.4060 7.4065 +0.01 2.01% kuna % Serbian 119.62 119.61 -0.01% 3.12% 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 1021.3 1017.5 +0.37 +10.8 7 7 % 2% Budapest 36684. 36416. +0.74 +14.6 24 07 % 3% Warsaw 2375.0 2365.4 +0.40 +21.9 5 8 % 3% Bucharest 8345.5 8340.8 +0.06 +17.7 7 4 % 9% Ljubljana 808.42 806.01 +0.30 +12.6 % 6% Zagreb 1890.5 1889.9 +0.03 -5.23% 8 4 % Belgrade 728.18 718.12 +1.40 +1.51 % % Sofia 716.60 720.14 -0.49% +22.2

0% BONDS

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

Republic

2-year 0.026 0.026 +071b +3bps

ps

5-year 0.093 0.04 +032b +4bps

ps

10-year 0.898 0 +044b +0bps

ps Poland

2-year 1.814 -0.017 +250b -1bps

ps

5-year 2.68 0.012 +291b +1bps

ps

10-year 3.338 -0.014 +288b -2bps

ps

FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M

interb ank

Czech Rep <PR 0.55 0.65 0.73 0

IBOR=>

Hungary <BU 0.21 0.25 0.31 0.15

BOR=>

Poland <WI 1.772 1.795 1.86 1.73

BOR=>

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

(Additional reporting by Luiza Ilie in Bucharest)