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CEE MARKETS-Currencies hold around one-week lows after ECB meeting

Joanna Plucinska

WARSAW, July 26 (Reuters) - Central European currencies remained around one-week lows on Friday after the previous day's more positive than expected assessment of the euro zone economy from European Central Bank Governor Mario Draghi. The euro, the key reference currency in central Europe, hit a two-month low on Thursday after the ECB opened the door to further stimulus but then rallied when Draghi told a news conference the risk of recession remained low. The Czech crown eased by 0.01% and the Polish zloty by 0.08% while Hungary's forint was down 0.14% at 0848 GMT. However, analysts expect Eastern European currencies to firm again before next week's U.S. Federal Reserve meeting, where the central bank is expected to cut interest rates. "From next week the zloty may strengthen closer to the Fed meeting ... probably after this (ECB) disappointment we will be a bit more careful," said Piotr Poplawski, senior economist at ING in Poland, referring to expectations that the chances of monetary easing might be smaller after Draghi's comment. Central banks in the region have adopted a wait-and-see stance despite higher economic growth and inflation, with loose global monetary policy having eased pressure on them to act. "The decision of the ECB on Thursday, and the expected rate cut by the Fed next week, helps the Hungarian central bank to maintain the current ultra-loose monetary conditions that also keep rates low on household loans," David Nemeth, an analyst at KH Bank in Budapest, said in a note. Czech central bank Vice-Governor Tomas Nidetzky told Reuters this week that rate stability was most likely and loosening by the ECB or Fed would not automatically mean the Czech bank would have to follow suit. Poland's 10-year yield hovered around record-low levels at 1.973% on Thursday. Polish yields have been falling since the beginning of the year after a drop in global bond yields as market expectations for rate cuts by leading central banks increased against a backdrop of weak economic data and concern over a global slowdown.

CEE SNAPSHO ATMARKETS T 1048

CET CURRENC IES

Latest Previou Daily Change

s

bid close change in 2019EURCZK Czech <EURCZK 25.5440 25.5410 -0.01% +0.64%= crown =>EURHUF Hungary <EURHUF 326.570 326.125 -0.14% -1.68%= forint => 0 0EURPLN Polish <EURPLN 4.2625 4.2590 -0.08% +0.64%= zloty =>EURRON Romanian <EURRON 4.7267 4.7245 -0.05% -1.54%= leu =>EURHRK Croatian <EURHRK 7.3840 7.3850 +0.01% +0.35%= kuna =>EURRSD Serbian <EURRSD 117.620 117.730 +0.09% +0.58%= dinar => 0 0Note: calculated from 1800daily CET

change

Latest Previou Daily Change

s

close change in 2019.PX Prague 1073.05 1074.02 -0.09% +8.77%

00

.BUX Budapest 41101.9 41353.6 -0.61% +5.02%9 2.WIG20 Warsaw <.WIG20 2311.35 2310.31 +0.05% +1.53%>.BETI Buchares 8952.44 8968.90 -0.18% +21.25t %.SBITO Ljubljan <.SBITO 869.55 869.06 +0.06% +8.12%P a P>.CRBEX Zagreb <.CRBEX 1926.79 1918.62 +0.43% +10.18> %.BELEX Belgrade <.BELEX 736.85 738.72 -0.25% -3.26%15 15>.SOFIX Sofia <.SOFIX 582.90 580.60 +0.40% -1.94%>

BONDS

Yield Yield Spread Daily(bid) change vs Bund change

in

Czech spread

Republic

CZ2YT 2-year <CZ2YT= 1.3470 0.0780 +211bp +8bpsRR RR> sCZ5YT= 5-year <CZ5YT= 1.1990 0.0620 +190bp +6bpsRR RR> sCZ10YT <CZ10YT 1.3590 0.0220 +172bp +3bps=RR 10-year =RR> s

Poland

PL2YT= 2-year <PL2YT= 1.5300 -0.0290 +229bp -3bpsRR RR> sPL5YT= 5-year <PL5YT= 1.7830 0.0470 +249bp +5bpsRR RR> sPL10YT <PL10YT 2.1240 0.0540 +249bp +6bps=RR 10-year =RR> sFORWARD RATE AGREEME

NT

3x6 6x9 9x12 3M

interba nk

Czech <CZKFRA 2.13 2.03 1.95 2.16Rep <PRIBO

R=>

Hungary <HUFFRA 0.31 0.37 0.40 0.26><BUBOR

=>

Poland <PLNFRA 1.74 1.73 1.72 1.72><WIBOR

=>

Note: are for askFRA prices

quotes

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(Reporting by Joanna Plucinska, Alicja Ptak, Jason Hovet and Krisztina Than Editing by David Goodman)