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CEE MARKETS-Leu steady after lower-than-expected CPI data

BUDAPEST, Sept 12 (Reuters) - The Romanian leu held steady after lower-than-expected inflation data on Tuesday, which confirmed that the pace of price growth across the region remains moderate. Romanian consumer price inflation slowed to 1.2 percent on the year in August, from July's 1.4 percent, below market expectations for 1.5 percent, helped by a robust fall in food prices. All analysts polled by Reuters expect the Romanian central bank to keep interest rates on hold at a record low 1.75 percent at its next meeting on Oct. 3. Five out of eight see higher rates by the end of the first quarter of 2018. "CPI below consensus should be positive for Romanian government bonds. Hence, mildly positive for the leu as bonds could catch up a bit with regional sovereign debt markets," said Ciprian Dascalu, chief economist at ING Bank in Romania. Other central European currencies were also steady in early trade, although analysts expect the Czech crown to resume its firming trend, started after the central bank abandoned a cap that had kept the unit from appreciating. "EUR/CZK continues trading around 26.1, a level it reached in July as the appreciation trend following the FX regime abandoning faded," said analyst Wolfgang Ernst said at RBI in Vienna. "Still, at these levels we would regard CZK as undervalued and we would expect the appreciation trend to continue over the coming months until EUR/CZK has neared in on a fair value around 25," he said. A Reuters poll conducted last week indicated that the crown would lead currency gains in Central Europe in the next 12 months as the Czech central bank, the first in the region to start tightening, raises interest rates. The crown has gained about 3.5 percent against the euro since April, when the Czech central bank (CNB) abandoned a cap that had kept it at 27 to the euro or weaker for years. Meanwhile, Hungary's central bank, the most dovish in the region, could decide to ease monetary conditions even further at its meeting next week, to combat stubbornly low inflation after what it sees as a temporary jump in August and September.

CEE SNAPSHOT AT 0920 CET

MARKETS CURRENCIES

Latest Previous Daily Change bid close change in 2017 Czech crown 26.0910 26.0925 +0.01 3.51%

%

Hungary forint 306.7000 306.5600 -0.05% 0.69% Polish zloty 4.2500 4.2475 -0.06% 3.62% Romanian leu 4.5985 4.5983 +0.00 -1.38%

%

Croatian kuna 7.4420 7.4385 -0.05% 1.52% Serbian dinar 119.3100 119.4400 +0.11 3.39%

%

Note: daily calculated previous close at 1800 change from CET

STOCKS

Latest Previous Daily Change close change in 2017 Prague 1029.67 1023.43 +0.61 +11.73 % % Budapest 38019.13 37895.85 +0.33 +18.80 % % Warsaw 2520.45 2513.44 +0.28 +29.39 % % Bucharest 8068.85 8058.72 +0.13 +13.89 % % Ljubljana 811.05 809.53 +0.19 +13.02 % % Zagreb 0.00 1881.44 +0.00 -100.00 % % Belgrade 0.00 728.73 +0.00 -100.00 % % Sofia 704.74 700.46 +0.61 +20.17 % %

BONDS

Yield Yield Spread Daily (bid) change vs change Bund in Czech Republic spread 2-year 0 0 +075b -1bps

ps

5-year -0.033 -0.053 +032b -7bps

ps

10-year <CZ10YT=RR 0.948 0.015 +060b +0bps > ps

Poland

2-year 1.673 -0.006 +242b -1bps

ps

5-year 2.534 0.016 +289b +0bps

ps

10-year <PL10YT=RR 3.191 0.016 +284b +0bps > ps FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M

interba nk

Czech Rep <P 0.71 0.85 0.95 0

RIBOR=>

Hungary <B 0.11 0.12 0.14 0.14

UBOR=>

Poland <W 1.77 1.776 1.805 1.73

IBOR=>

Note: FRA quotes are for

ask prices

(Reporting by Reuters bureaux; Writing by Gergely Szakacs; Editing by)