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CEE MARKETS-Currencies, bonds rebound on dollar, U.S. yields retreat

* Dollar retreat reduces pressure on CEE currencies

* Crown zigzags as investors bet for 25 or 50 bp rate hike

* Romanian repo tender does not end leu liquidity squeeze

BUDAPEST/BUCHAREST, Oct 30 (Reuters) - Some Central European currencies and government bond prices firmed on Monday as last week's dollar buying abated and U.S. 10-year government bond yields gave up some ground. The region's currencies were sold for the dollar last week, also resulting in their weakening against the euro, after the European Central Bank (ECB) extended its asset buying programme, even though cut its monthly amount. But on Monday the dollar slipped on profit-taking after its biggest weekly rise this year. U.S. 10-year yields also retreated from 7-month highs. While strong U.S. economic data and bets that Federal Reserve Chair Janet Yellen will have a hawkish successor may continue to buoy the dollar and U.S. yields, their retreat relieved Central European assets. The Polish zloty firmed 0.2 percent to 4.24 against the euro by 0952 GMT, and the Hungarian forint gained 0.1 percent to 310.15. Polish government bond yields fell and their curve flattened slightly, with 10-year papers trading at 3.383 percent, down 4 basis points. The crown hovered around Friday's closing levels, with investors continuing to digest the possible impact of last week's ECB decisions and comments about the Czech central bank (CNB) meeting this Thursday. In August, the CNB became the first European Central Bank to lift interest rates since 2012, and on Thursday it is widely expected to deliver another 25 or 50 basis point hike. The weaker the crown is, the bigger a hike can be, while the ECB's asset buying extension may mean that euro zone interest rates will remain low longer, keeping the crown attractive even if Czech rates rise less, market participants said. "The CNB will have to be careful not to cause too much policy diversion with the ECB," said Jakub Cervenka, analysts of Raiffeisen in a note. The Czech bond yield curve also flattened, with bids rising 9 basis points for the 2-year paper to 0.318 percent and the 10-year yield dropping 7 basis points to 1.612. Romania's leu firmed 0.1 percent, after a rare repo auction by the central bank to provide leu to commercial banks failed to end the squeeze. The central bank injected 4.12 billion lei ($1.04 billion)into the market in the one-week repo tender at its 1.75 percent annual repo rate. The 3-month interbank rate was still offered at 1.87 percent, its highest level in 3 years. Hungarian government bond yields were steady from Friday's fixing. Investors watch if the Hungarian central bank's fx swap tender boosts forint liquidity further and push money market and debt yields lower, one trader said.

CEE MARKETS SNAPSH AT 1052 CET

OT CURRENCIES

Latest Previo Daily Change

us

bid close change in

2017

Czech crown 25.650 25.641 -0.04% 5.29% 0 0 Hungary 310.15 310.47 +0.10 -0.43% forint 00 50 % Polish zloty 4.2400 4.2472 +0.17 3.87%

%

Romanian leu 4.5990 4.6020 +0.07 -1.39%

%

Croatian 7.5220 7.5135 -0.11% 0.44%

kuna

Serbian 119.15 119.25 +0.08 3.52% 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 1062.6 1062.2 +0.03 +15.3 5 8 % 0% Budapest 39903. 39667. +0.60 +24.6 97 13 % 9% Warsaw 2514.2 2488.5 +1.04 +29.0 6 0 % 7% Bucharest 7839.2 7857.7 -0.24% +10.6 4 9 4% Ljubljana 795.82 796.53 -0.09% +10.9

0%

Zagreb 1889.1 1891.8 -0.15% -5.30% 2 7 Belgrade 726.51 726.08 +0.06 +1.27 % % Sofia 668.04 665.73 +0.35 +13.9 % 2%

BONDS

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

Republic

2-year 0.318 0.089 +108b +8bps

ps

5-year 0.775 0.015 +112b +1bps

ps

10-year 1.612 -0.07 +123b -7bps

ps Poland

2-year 1.586 0.009 +234b +0bps

ps

5-year 2.619 -0.037 +297b -4bps

ps

10-year 3.395 -0.001 +301b +0bps

ps

FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M

interb ank

Czech Rep <PR 0.89 1.08 1.23 0

IBOR=>

Hungary <BU 0.08 0.11 0.14 0.03

BOR=>

Poland <WI 1.78 1.824 1.94 1.73

BOR=>

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

($1 = 3.9516 lei)

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