CEE MARKETS-Currencies ease on fear of big ECB asset buying cut

* Forint leads currency easing, weakest in more than two weeks

* Concerns is ECB may cut asset buying by more than expected

* Crown firming could continue after hiccup on rate hike bets

BUDAPEST/PRAGUE, Oct 26 (Reuters) - Central European currencies and government bonds eased slightly amid some worries that the European Central Bank (ECB) may signal faster than expected cuts in its asset buying programme on Thursday. The asset buying in the euro zone has indirectly helped currencies and government bonds in the European Union's eastern members, too. According to a Reuters poll of economist, the ECB will say that it will start trimming the purchases to 40 billion euros from 60 billion euros in January. The yield on some Hungarian and Polish government bonds rose 3.437, the highest level since Oct. 10. In currency markets, the forint led the weakening, and touched its weakest levels in more than two weeks against the euro. It shed 0.2 percent, to trade at 311 at 0812 GMT, and technical factors have opened the way for it towards 312, Erste analysts said in a note. "All eyes are on the ECB, and euro zone economic figures have moved expectations towards a hawkish message," one Budapest-based fixed income trader said. "The dovish policy of the Hungarian central bank is keeping yields here down... The question is whether ammunition remains for the bank if (ECB chief Mario) Draghi is hawkish today," the trader added. The zloty and the Czech crown eased 0.1 percent against the euro, while the leu got stuck at the 4.6 line which some market participants believe is defended by the central bank. The crown retreated after a rally which boosted it to four-year highs earlier this week, supported by hawkish comments from Czech central bank (CNB) rate setters. The comments from Vice-Governor Mojmir Hampl and rate setter Tomas Nidetzky underpinned expectations that the CNB will continue to increase its interest rates at its meeting on Nov. 2, and will indicate that more tightening will come.

The crown's strengthening can continue, market participants said. "It seems the CNB is still counting on the overboughtness of the crown and therefore it won't have to constrain its policy tightening with regards to the cautious ECB," CSOB analysts said in a note. Equities were mostly rangebound in the region. The key exception was Polish refiner Lotos which gained 6 percent after reporting 63 percent surge in third-quarter net profit.



Latest Previous Daily Change bid close change in 2017 Czech crown 25.6470 25.6200 -0.11% 5.30% Hungary 311.0000 310.3100 -0.22% -0.70%


Polish zloty 4.2451 4.2427 -0.06% 3.74% Romanian leu 4.5985 4.5985 +0.00% -1.38% Croatian 7.5145 7.5155 +0.01% 0.54%


Serbian 119.3000 119.5700 +0.23% 3.39%


Note: daily calculated previous close at 1800 CET change from


Latest Previous Daily Change close change in 2017 Prague 1060.48 1064.10 -0.34% +15.07% Budapest 39724.33 39840.92 -0.29% +24.13% Warsaw 2461.76 2449.89 +0.48% +26.38% Bucharest 7888.93 7880.70 +0.10% +11.35% Ljubljana 803.62 804.82 -0.15% +11.99% Zagreb 1886.01 1883.42 +0.14% -5.46% Belgrade 728.19 727.55 +0.09% +1.51% Sofia 653.97 654.37 -0.06% +11.52%


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


2-year 0.382 0.154 +109bps +15bps 5-year 0.83 0.004 +108bps +0bps 10-year 1.706 0.008 +122bps +1bps


2-year 1.661 -0.015 +237bps -2bps 5-year 2.708 0.01 +296bps +1bps 10-year 3.443 0.015 +296bps +1bps FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M interbank Czech Rep <PRIB 0.89 1.08 1.23 0


Hungary <BUBO 0.075 0.105 0.14 0.03


Poland <WIBO 1.7775 1.855 1.93 1.73


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

(Additional reporting by Agnieszka Barteczko in Warsaw; Editing