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CEE MARKETS-Currencies steady, Aug inflation data fail to boost Czech crown

BUDAPEST/PRAGUE, Sept 11 (Reuters) - Central European currencies were steady on Monday, with the Czech crown unmoved expectations and stayed above the central bank's target. Analysts are counting on another rate hike this year by the Czech central bank, following its first rate increase in a decade in August. Other central banks in the European Union's eastern region are still in easing mode, in keeping with the European Central Bank which last week maintained its accommodative policy and gave no sign it was ready to wind down its asset-buying programme. Most analysts said Monday's Czech data, which showed year-on-year inflation rate at 2.5 percent, pointed toward a possible hike in November, rather than when the bank meets on Sept. 27. The November meeting will be the next rate meeting after this month's meeting. The headline inflation figure was below the central bank's prediction of 2.6 percent. The bank has an inflation target of 2 percent with a tolerance band of one percentage point in both directions. The Czech market is also bracing for the expiry of a record amount of T-bills throughout this month. The largest maturity is due this week and investors may choose to cash in on the FX market. "The crown is obviously not willing to test 26 (versus the euro) again," CSOB said. "We expect the crown to trade slightly defensive this week." At 0742 GMT, the crown was trading steady at 26.088 to the euro, while the Hungarian forint was also unchanged at 306.60 versus the euro. Stocks in Central Europe firmed, with Bucharest leading gains, rising 0.9 percent by 0742 GMT, in what was seen as a positive correction after Friday's falls. Stocks dropped on Friday after the Romanian government said it may make an existing mandatory private pension scheme optional starting next year. Making it optional would probably reduce pension funds' investments, whose assets totalled 36.06 billion lei ($9.46 billion) at the end of June. The Bucharest exchange has risen 12 percent since the end of 2016, underperforming Warsaw and Budapest this year, partly due to worry about the future of the pension system.

CEE MARKETS SNAPSH AT 0942 CET

OT CURRENCIES

Latest Previo Daily Change

us

bid close change in 2017 Czech crown 26.088 26.102 +0.05 3.52% 0 0 % Hungary 306.60 306.62 +0.01 0.72% forint 00 00 % Polish zloty 4.2450 4.2467 +0.04 3.74%

%

Romanian leu 4.6010 4.6031 +0.05 -1.43%

%

Croatian 7.4310 7.4315 +0.01 1.67% kuna % Serbian 119.35 119.38 +0.03 3.35% 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 1023.5 1021.0 +0.24 +11.06 1 7 % % Budapest 37796. 37596. +0.53 +18.10 70 75 % % Warsaw 2495.0 2483.5 +0.46 +28.09 9 8 % % Bucharest 7930.1 7862.1 +0.87 +11.93 9 5 % % Ljubljana 812.57 811.98 +0.07 +13.24 % % Zagreb 1882.5 1882.7 -0.01% -5.63% 1 2 Belgrade 0.00 727.27 +0.00 -100.00 % % Sofia 707.59 705.51 +0.29 +20.66 % %

BONDS

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

Republic

2-year -0.108 0 +063b -2bps

ps

5-year 0.115 0.029 +048b +2bps

ps

10-year 0.945 0 +061b -2bps

ps Poland

2-year 1.67 -0.019 +240b -4bps

ps

5-year 2.516 0.003 +288b -1bps

ps

10-year 3.173 0 +284b -2bps

ps

FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M

interba nk

Czech Rep <PR 0.69 0.81 0.91 0

IBOR=>

Hungary <BU 0.13 0.15 0.18 0.15

BOR=>

Poland <WI 1.755 1.774 1.803 1.73

BOR=>

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

(Additional reporting by Radu Marinas in Bucharest; Editing by Raissa Kasolowsky)