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CEE MARKETS-Forint bucks ECB-driven rise, talked down by rate-setter Nagy

* Forint, zloty set multi-week highs on ECB expectations

* Forint dips into loss later on dovish rate-setter comments

* Hawkish rate-setter comments give limited help to crown

* Leu firms as ruling party settles government reshuffle

(Adds forint retreat on central banker comments) BUDAPEST, Oct 13 (Reuters) - Hungary's forint bucked a rise in central European currencies and bonds on Friday after Hungarian central bank Deputy Governor Marton Nagy spurred expectations for further monetary easing with dovish comments. At 1114 GMT it traded at 309, weaker by 0.1 percent, and off a three-week high set in early trade at 308.25. Nagy told a conference that there was still room for long-term Hungarian government debt yields to fall and that downside inflation risks had increased. "(The NBH) will do something stronger if the forint firms to 306," the dealer said, adding that a further cut in the bank's -0.15 percent overnight deposit rate was a possibility. The currency had strengthened against the euro earlier in tandem with its peers in the region after sources told Reuters the European Central Bank was likely to extend its asset purchases. Hungarian government bond prices extended their gains after Nagy's comments. Long maturities outperformed, with the 10-year benchmark yield dropping 6 basis points from Thursday's fixing to 2.55 percent. The bonds had firmed anyway, along with their Polish peers, after a Reuters report on a likely extension of asset purchases The ECB's asset purchases in the euro zone have indirectly also lifted demand for relatively high-yielding Central European assets. The Polish yield curve flattened a little, with the 10-year yield dropping 6 basis points to 3.32 percent, its lowest level since a downtrend in the dollar started to trigger zloty and forint buying early this month. The zloty, gaining 0.2 percent, hit a one-month high against the euro. U.S. inflation data due later on Friday may reduce the region's gains if they strengthen expectations for a Federal Reserve interest rate hike in December, traders said. The crown also got some support from hawkish comments from Vojtech Benda, one of the Czech central bank's seven rate-setters. "But Mr. Benda is just one of 7 illuminatis," Komercni Banka traders said in a note. The Czech central bank is the only one in the European Union to raise interest rates since 2012. Benda was quoted as saying on Thursday that the economy would benefit from a 50-75 basis-point rise in rates before the end of the year.

The leu firmed 0.1 percent to 4.586 against the euro. Romania's ruling Social Democrats, at a party meeting late on Thursday, endorsed a proposed government reshuffle, which had been weighing on Bucharest asset prices.

CEE MARKETS SNAPSH AT 1314 CET

OT CURRENCIES

Latest Previo Daily Change

us

bid close change in

2017

Czech crown 25.835 25.868 +0.13 4.54% 0 5 % Hungary 309.00 308.60 -0.13% -0.06% forint 00 50 Polish zloty 4.2586 4.2675 +0.21 3.41%

%

Romanian leu 4.5860 4.5890 +0.07 -1.11%

%

Croatian 7.5100 7.5097 +0.00 0.60% kuna % Serbian 119.30 119.36 +0.05 3.39% 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 1053.0 1054.8 -0.18% +14.2 1 8 6% Budapest 38748. 38772. -0.06% +21.0 61 08 8% Warsaw 2539.3 2537.6 +0.07 +30.3 8 9 % 6% Bucharest 8034.3 7997.2 +0.46 +13.4 9 2 % 0% Ljubljana 816.26 813.57 +0.33 +13.7 % 5% Zagreb 1860.2 1863.2 -0.16% -6.75% 3 9 Belgrade 725.77 727.79 -0.28% +1.17

%

Sofia 671.69 668.31 +0.51 +14.5 % 4%

BONDS

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

Republic

2-year 0.086 0 +081b +1bps

ps

5-year 0.495 -0.017 +080b +1bps

ps

10-year 1.366 -0.006 +095b +2bps

ps Poland

2-year 1.704 -0.014 +243b +0bps

ps

5-year 2.675 -0.016 +298b +1bps

ps

10-year 3.328 -0.039 +291b -1bps

ps

FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M

interb ank

Czech Rep <PR 0.75 0.87 0.99 0

IBOR=>

Hungary <BU 0.07 0.11 0.135 0.03

BOR=>

Poland <WI 1.764 1.803 1.871 1.73

BOR=>

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

(Additional reporting by Jason Hovet in Prague; Editing by Alison Williams and Hugh Lawson)