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CEE MARKETS-Crown hits 4-year high, rate hike bets weigh on bonds

* Crown strongest since intervention regime was launched in 2013

* Moody's may improve Hungary's rating this week-trader

(Adds Polish economic figures, weakening of Czech 10-year bonds) BUDAPEST/PRAGUE, Oct 18 (Reuters) - The Czech crown hit a four-year high and the zloty tested 3-month highs against the euro on Wednesday as Polish retail and industrial data confirmed robust economic growth in Central Europe. The crown firmed past 25.7 for the first time since the central bank in late 2013 launched an intervention regime to keep the currency week. In April it removed a cap on the crown at 27, letting it rise, and in August it started to reverse years of interest rate cuts. Another hike may come as early as next month, and that prospect, coupled with strong economic figures, lifts the crown.

Of the bonds offered by the Czech government at its auction on Wednesday, there were no sales of zero-coupon paper. "With CNB hikes looming people are not interested in short bonds at these levels," a dealer said. After the auction, the Czech 10-year benchmark government bond yield, bid at 1.453 percent, reached its highest level since August 2014. The crown shrugged off concerns that the likely election victory of ANO party at Czech elections over the weekend could lead to drawn-out coalition talks, Goldman Sachs said in a note.

"Domestic financial markets are typically resilient to Czech political events, given the Czech Republic's strong fiscal position, sound institutions and independent central bank," it added. Polish and Czech current account data released this week and recent government budget figures have confirmed that most of the region's main economies remain well-balanced, analysts said. Polish figures released on Wednesday showed 8.6 percent annual surge in retail sales in September, and 4.3 percent rise in industrial output. The zloty firmed 0.15 percent to 4.2295 against the euro, still a touch off Tuesday's three-month highs. Polish government bonds eased slightly, with the 10-year benchmark yield rising 3 basis points to 3.317 percent. The forint, steady on Wednesday at 308.15 per euro, reached 5-week highs versus the euro this week. It traded on the firm side of the key psychological line of 310, even though Hungary's central bank has flagged further monetary easing. "Moody's could lift the outlook of Hungary's debt rating (in its review) to positive on Friday, and based on Hungarian economic indicators, an upgrade cannot be ruled out either," one Budapest-based fixed income trader said. Regional central bankers also watch European Central Bank rate setters and any hawkish guidance from the ECB's Oct 26 meeting could reduce appreciation pressure on regional currencies, analysts said.

CEE MARKETS SNAPSH AT 1457 CET

OT CURRENCIES

Latest Previo Daily Change

us

bid close change in

2017

Czech crown 25.690 25.784 +0.37 5.13% 0 5 % Hungary 308.15 308.23 +0.03 0.22% forint 00 00 % Polish zloty 4.2295 4.2358 +0.15 4.12%

%

Romanian leu 4.5875 4.5840 -0.08% -1.14% Croatian 7.5080 7.5075 -0.01% 0.63%

kuna

Serbian 119.13 119.14 +0.01 3.54% 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 1053.7 1055.9 -0.22% +14.3 0 9 3% Budapest 39075. 38909. +0.43 +22.1 18 78 % 0% Warsaw 2517.8 2514.3 +0.14 +29.2 2 6 % 6% Bucharest 8047.5 8063.8 -0.20% +13.5 6 0 9% Ljubljana 810.37 811.10 -0.09% +12.9

3%

Zagreb 1849.2 1847.0 +0.12 -7.30% 4 8 % Belgrade 726.52 730.39 -0.53% +1.28

%

Sofia 669.74 671.11 -0.20% +14.2

1% BONDS

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

Republic

2-year 0.277 0.047 +099b +3bps

ps

5-year 0.61 0.074 +092b +5bps

ps

10-year 1.453 0.043 +105b +0bps

ps Poland

2-year 1.709 0.013 +243b +0bps

ps

5-year 2.681 0.023 +299b +0bps

ps

10-year 3.322 0.03 +292b -1bps

ps

FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M

interb ank

Czech Rep <PR 0.81 0.99 1.13 0

IBOR=>

Hungary <BU 0.07 0.1 0.145 0.03

BOR=>

Poland <WI 1.773 1.814 1.878 1.73

BOR=>

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

(Reporting by Sandor Peto and Jason Hovet Additional reporting