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CEE MARKETS-Crown touches 5-week low on doubts over rate hike course

* Dovish ECB message gives some support to CEE currencies

* Crown sets 5-week low as CNB not seen raising rates next week

BUDAPEST, Dec 15 (Reuters) - The crown touched five-week lows against the euro on Friday due to concerns ahead of next week's Czech central bank (CNB) meeting that its resolve to boost interest rates has weakened. The forint and the zloty received some support from the European Central Bank's dovish message after its Thursday meeting. They firmed 0.1 percent against the euro by 1034 GMT. Monetary stimulus in the euro zone has been helping currencies in the European Union's fast-growing eastern economies. The crown has drawn additional support from two CNB rate hikes since August and expectations for more, and with gains over five percent since 2016 it is the world's top-performing currency this year. But inflation slowed in November and wage growth was not as robust as expected, and the CNB could take a pause in its tightening at its meeting on Dec. 21, analysts said. The crown set a five-week low at 25.72 against the euro early on Friday, before rebounding to 25.695. The currency may test its next key technical resistance level, 25.75 soon, and if it is breached, more weakening could come, KBC analysts said in a note. "(Concerning) the CNB Bank Board meeting, we are afraid that its outcome could trigger even more losses for the Czech currency," they said, adding that based on the latest economic data the CNB's future rate increases could be slow. Inflation remains above the CNB's two percent target, and the economy is growing robustly. "The next CNB hike will, in our view, come at the February meeting," Nordea said in a note. Analysts in a Reuters poll early this month projected a firming of the crown to 25 versus the euro by December next year. Analysts also expect the forint to firm and regain this year's lost ground of almost two percent against the euro, even though the National Bank of Hungary remains the region's most dovish central bank. It is expected to keep its base rate on hold on Tuesday, and for years afterwards. But it could release some new details of its upcoming interest rate swap and mortgage note programmes aimed at pushing long-term interest rates lower and encouraging fixed-rate mortgage lending. The forint, like the crown, is buoyed by a big current account surpluses. In other regional markets, equity indices mostly eased slightly, tracking a decline in Asian and Western European stock markets amid cautious year-end positioning.

CEE MARKETS SNAPSH AT 1134 CET

OT CURRENCIES

Latest Previo Daily Change

us

bid close change in

2017

Czech crown 25.695 25.690 -0.02% 5.11% 0 5 Hungary 313.88 314.33 +0.14 -1.61% forint 00 00 % Polish zloty 4.2192 4.2245 +0.13 4.38%

%

Romanian leu 4.6350 4.6328 -0.05% -2.16% Croatian 7.5460 7.5465 +0.01 0.12% kuna % Serbian 119.00 119.24 +0.20 3.66% 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 1063.0 1065.4 -0.23% +15.3 0 2 4% Budapest 38509. 38616. -0.28% +20.3 17 19 3% Warsaw 2423.0 2434.6 -0.48% +24.3 4 1 9% Bucharest 7605.2 7587.2 +0.24 +7.34 9 6 % % Ljubljana 791.41 794.28 -0.36% +10.2

9%

Zagreb 1858.5 1859.7 -0.07% -6.83% 0 6 Belgrade 744.43 747.24 -0.38% +3.77

%

Sofia 663.81 663.57 +0.04 +13.2 % 0%

BONDS

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

Republic

2-year 0.35 0.12 +106b +10bp ps s 5-year 0.74 0.027 +108b +3bps

ps

10-year 1.459 0.034 +115b +5bps

ps Poland

2-year 1.639 -0.012 +235b -3bps

ps

5-year 2.603 -0.012 +295b -1bps

ps

10-year 3.218 -0.015 +291b +0bps

ps

FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M

interb ank

Czech Rep <PR 1.05 1.25 1.4 0

IBOR=>

Hungary <BU 0.08 0.135 0.205 0.03

BOR=>

Poland <WI 1.77 1.81 1.905 1.72

BOR=>

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

(Additional reporting by Jason Hovet in Prague, Editing by William Maclean)