CEE MARKETS-Stocks firm; market rates rise helps leu, worries government

* Polish shares get help from FTSE Russell reclassification

* Renewed dlr strength keep fx under pressure despite good PMIs

* Hungarian bonds lead yields rise, tracking euro zone

* Crown hovers around 26/euro after robust PMI

(Adds rise in interbank rates, PM criticism of central bank in Romania) BUDAPEST/BUCHAREST, Oct 2 (Reuters) - Central European equities rose on Monday partly because index provider FTSE Russell said late on Friday that it would promote Poland to a developed market from its advanced emerging class from next year. Warsaw stocks rose 0.3 percent by 1355 GMT. Budapest's main index gained 1 percent, after OTP CEO Sandor Csanyi said the region's biggest independent lender planned to buy at least five banks in the next two years. . Strong Czech, Hungarian and Polish manufacturing indices (PMI) may have also provided some help to assets in the region. But demand for the region's currencies was reduced by a strengthening of the dollar, with Catalonia's independence vote weighing on the euro. The leu still firmed 0.3 percent against the euro to 4.586, setting a four week high. "It is getting an expected boost from higher interbank rates," a Bucharest-based trader said. Romanian Prime Minister Mihai Tudose criticised the central bank late on Friday for failing to curb a rise in interbank interest rates, driven by inflation expectations. Electricity and gas tariffs for households rose from Oct. 1. The bank set the three-month ROBOR interbank rate even higher on Monday. The ask level, set at 1.71 percent, was the highest since late 2014. The zloty traded weaker by 0.1 percent, at 4.313, down 0.1 percent, near 6-1/2-month lows touched last week. Poland reported a higher than expected PMI manufacturing index of 53.7 for September, underpinning that economic growth remains strong. But the zloty was unable to benefit from the good figures. Hungary, which calculates its own index with different methodology, reported an even higher figure, at 59.3. The forint also eased, staying near its weakest levels against the euro since May. A new round of monetary easing measures launched last month has been keeping it under pressure. The measures pushed down Hungarian government debt yields to record lows, but a rise in U.S. and euro zone debt yields triggered profit-taking since last week. Hungary's yields rose further on Monday, with the 10-year bond at 2.63 percent, up 5 basis points from Friday. Elsewhere, the Czech Republic also reported a strong PMI index at a higher-than-expected 56.6. The crown danced around the 26 psychological line against the euro, near its strongest levels since the central bank (CNB) removed a cap which had kept it weaker than 27. Expectations that the CNB will continue to lift its interest rates in November buoy the currency, but a huge amount of long crown positions held by foreigners keeps a lid on the unit.



Latest Previo Daily Change


bid close change in


Czech crown 25.982 25.994 +0.05 3.95% 0 5 % Hungary 311.75 311.41 -0.11% -0.94% forint 00 50 Polish zloty 4.3130 4.3096 -0.08% 2.11% Romanian leu 4.5860 4.5999 +0.30 -1.11%


Croatian 7.4990 7.4925 -0.09% 0.75%


Serbian 119.00 119.20 +0.17 3.66% dinar 00 00 % Note: daily calculated previo close 1800 change from us at CET


Latest Previo Daily Change


close change in


Prague 1049.9 1045.1 +0.46 +13.9 8 7 % 3% Budapest 37657. 37290. +0.98 +17.6 70 65 % 7% Warsaw 2460.0 2453.4 +0.27 +26.2 5 6 % 9% Bucharest 7896.6 7877.9 +0.24 +11.4 3 2 % 5% Ljubljana 795.37 796.55 -0.15% +10.8


Zagreb 1807.5 1811.1 -0.20% -9.39% 3 2 Belgrade 719.50 720.76 -0.17% +0.30


Sofia 689.60 688.11 +0.22 +17.5 % 9%


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


2-year 0.281 0.085 +099b +11bp ps s 5-year 0.385 0.126 +066b +14bp ps s 10-year 1.323 0.116 +087b +13bp ps s


2-year 1.755 0.003 +246b +3bps


5-year 2.691 -0.011 +297b +0bps


10-year 3.367 -0.009 +292b +0bps



interb ank

Czech Rep <PR 0.74 0.87 1.02 0


Hungary <BU 0.07 0.11 0.145 0.03


Poland <WI 1.765 1.815 1.878 1.73


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

(Additional reporting by Warsaw bureau; Editing by Catherine Evans)