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CEE MARKETS-Forint eases, central bank seen pushing for weakening

* Forint eases, but stays near strongest level since May 2015

* Hungarian central bank seen keeping interest rates on hold

* CEE bonds rangebound, equities mostly rise

BUDAPEST, Aug 22 (Reuters) - The forint touched its weakest levels this week against the euro on Tuesday before a central bank rate meeting which some market players expect to call for a weaker currency. While most Central European currencies remained rangebound, the forint eased 0.2 percent versus the single currency, to trade at 303.85 at 0837 GMT, still near its strongest levels since May 2015. "It is still firmer than the central bank probably wants to see it," one Budapest-based dealer said. The dealer said he would be looking for some hints in the bank's regular statement after the meeting about the forint, which has been supported by sound macroeconomic fundamentals. Another dealer did not rule out some kind of comments to talk down the currency. But he said only further interest rate cuts could weaken the forint. The bank has pledged to keep the benchmark base rate unchanged at 0.9 percent for a sustained period. June Hungarian gross wages figures released on Tuesday showed an annual rise of 14.4 percent, maintaining the fastest pace since 2005 and one of the fastest growth rates in Central Europe. The Hungarian wage surge is still unlikely to lift annual average inflation above the central bank's 3-percent target before 2019, a Reuters poll of analysts showed last week.

Germany's 10-year Bund yield was marginally higher on Tuesday, though near one-week lows. Hungarian bonds were slightly firmer, with the yield of the 10-year bond dropping 1 basis point to 3.05 percent. The corresponding Polish yield rose marginally from four-week lows to 3.3 percent. Hungary sold 3-month Treasury bills at an average yield of zero on Tuesday for the first time ever. Central European stock indices mostly tracked a rise of Western European shares, led by 0.5 percent rise in Budapest . Bucharest's main stock index hovered in the past two weeks' narrow ranges. The bourse shrugged off a threat from Prime Minister Mihai Tudose, reported by the daily Ziarul Financiar, that unless banks became fair and reported profits, the government would feel bound to make a list of banks where Romanians' deposits were at risk. The remarks reflected a desire to generate more taxes from banks, like Hungary and Poland. But tax policies have been changeable in Romania, and the country's banking system has been solid. The comments did not immediately affect the shares of Banca Transilvania, though the stocks eased 0.4 percent in late morning trade.

CEE MARKETS SNAPSH AT 1037 CET

OT CURRENCIES

Latest Previo Daily Change

us

bid close change in

2017

Czech crown 26.111 26.084 -0.10% 3.43% 0 5 Hungary 303.85 303.31 -0.18% 1.64% forint 00 50 Polish zloty 4.2760 4.2750 -0.02% 2.99% Romanian leu 4.5870 4.5871 +0.00 -1.13%

%

Croatian 7.4010 7.4035 +0.03 2.08% kuna % Serbian 119.34 119.38 +0.03 3.36% 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 1034.6 1032.0 +0.25 +12.2 0 4 % 6% Budapest 37299. 37097. +0.54 +16.5 48 85 % 5% Warsaw 2378.2 2377.2 +0.04 +22.0 4 8 % 9% Bucharest 8308.1 8317.9 -0.12% +17.2 8 5 6% Ljubljana 811.06 809.00 +0.25 +13.0 % 3% Zagreb 1901.9 1898.4 +0.18 -4.66% 1 0 % Belgrade 721.68 723.00 -0.18% +0.60

%

Sofia 719.06 720.71 -0.23% +22.6

2% BONDS

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

Republic

2-year -0.026 -0.026 +068b -3bps

ps

5-year 0.063 -0.014 +034b -2bps

ps

10-year 0.915 0.032 +050b +2bps

ps Poland

2-year 1.772 -0.004 +248b -1bps

ps

5-year 2.633 0.003 +291b +0bps

ps

10-year 3.311 0.004 +290b +0bps

ps

FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M

interb ank

Czech Rep <PR 0.6 0.7 0.8 0

IBOR=>

Hungary <BU 0.22 0.285 0.35 0.15

BOR=>

Poland <WI 1.765 1.791 1.834 1.73

BOR=>

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

(Additional reporting by Luiza Ilie in Bucharest; Editing by Andrew Heavens)