CEE MARKETS-Crown weakens on lower CPI reading, forint leads gains

    PRAGUE, June 10 (Reuters) - The Czech crown eased on
Thursday after a lower-than-expected domestic inflation reading,
even as rate hike expectations remained intact, while Central
Europe's recovery stokes worries of rising prices in the region.
    The Hungarian forint led gains, rising 0.1% and
hanging near a 10-month high, a day after the National Bank of
Hungary cemented expectations it could become the first in the
European Union to launch a tightening cycle in June.

    Central Europe is facing the strongest inflation rise in the
EU as economies recover from the COVID-19 pandemic. 
    Poland's central bank, however, kept rates on hold on
Wednesday and did not deliver hints at a more hawkish bias,
which some economists had expected. That weighed on the Polish
zloty, which was 0.1% lower at 4.479 to the euro at
0921 GMT.
    "The market consequences of yesterday's events will be zloty
weakening and a probable break of EUR/PLN above 4.4740," Bank
Millennium said.
    Markets were also keeping an eye on a European Central Bank
meeting on Thursday, with its stimulus flow seen unchanged.
    The crown was down 0.1% at 25.427 to the euro.
    Czech headline inflation slowed in May to a rate of 2.9%,
missing analysts' expectations. Analysts said the Czech central
bank (CNB) could still deliver a rate hike in June or August.
    Erste Group Bank said a June move was more likely.
    "Today's data could imply a very slight weakening of the
crown. However, we do not expect a significant movement, as
markets will probably stay optimistic about the future CNB
policy," it said.
    Hungary meets on rates on June 22 and the Czech bank, a day
later. Commerzbank said signals on future policy after Hungary
raises rates would be important for the forint, and it remained
    "Even if the (Hungary central bank) takes back the COVID
rate cuts already in June, in reaction to rising price pressure,
 it will keep interest rates at comparatively low levels longer
so that real interest rates remain negative," it said. "That
makes significant HUF appreciation unlikely longer term."
                   CEE      SNAPSHO   AT                      
                   MARKETS  T        1121              
                            Latest   Previou  Daily    Change
                            bid      close    change   in 2021
 EURCZK  Czech     <EURCZK  25.4270  25.3920   -0.14%   +3.15%
 =       crown     =>                                  
 EURHUF  Hungary   <EURHUF  346.190  346.575   +0.11%   +4.77%
 =       forint    =>             0        0           
 EURPLN  Polish    <EURPLN   4.4790   4.4735   -0.12%   +1.79%
 =       zloty     =>                                  
 EURRON  Romanian  <EURRON   4.9215   4.9228   +0.03%   -1.15%
 =       leu       =>                                  
 EURHRK  Croatian  <EURHRK   7.5000   7.5005   +0.01%   +0.63%
 =       kuna      =>                                  
 EURRSD  Serbian   <EURRSD  117.560  117.605   +0.04%   +0.01%
 =       dinar     =>             0        0           
         Note:     calcula                    1800            
         daily     ted                        CET      
         change    from STOCKS                                     
                            Latest   Previou  Daily    Change
                                     close    change   in 2021
 .PX     Prague             1180.33  1180.24   +0.01%   +14.91
                                          00                 %
 .BUX    Budapest           48175.9  48206.5   -0.06%   +14.41
                                  0        6                 %
 .WIG20  Warsaw    <.WIG20  2225.77  2218.45   +0.33%   +12.19
                   >                                         %
 .BETI   Buchares           11393.9  11359.1   +0.31%   +16.20
         t                        0        3                 %
 .SBITO  Ljubljan  <.SBITO  1133.23  1126.67   +0.58%   +25.80
 P       a         P>                                        %
 .CRBEX  Zagreb    <.CRBEX  1962.15  1958.03   +0.21%   +12.81
                   >                                         %
 .BELEX  Belgrade  <.BELEX   782.19   781.06   +0.14%   +4.49%
 15                15>                                 
 .SOFIX  Sofia     <.SOFIX   537.34   538.12   -0.14%   +20.07
                   >                                         %
                            Yield    Yield    Spread   Daily
                            (bid)    change   vs Bund  change
         Czech                                         spread
 CZ2YT=    2-year  <CZ2YT=   0.2740  -0.1120   +095bp   -11bps
 RR                RR>                              s  
 CZ5YT=    5-year  <CZ5YT=   1.5060  -0.0160   +212bp    -3bps
 RR                RR>                              s  
 CZ10YT            <CZ10YT   1.7290  -0.0020   +197bp    -1bps
 =RR     10-year   =RR>                             s  
 PL2YT=    2-year  <PL2YT=   0.4050  -0.0350   +108bp    -3bps
 RR                RR>                              s  
 PL5YT=    5-year  <PL5YT=   1.2530  -0.0450   +186bp    -5bps
 RR                RR>                              s  
 PL10YT            <PL10YT   1.8080  -0.0260   +205bp    -3bps
 =RR     10-year   =RR>                             s  
                            3x6      6x9      9x12     3M
         Czech     <CZKFRA     0.75     1.00     1.30     0.42
         Rep       ><PRIBO                             
         Hungary   <HUFFRA     1.33     1.58     1.73     0.93
         Poland    <PLNFRA     0.35     0.55     0.73     0.21
         Note: FRA quotes                                     
         are for ask                                   
 (Reporting by Jason Hovet in Prague, Anita Komuves in Budapest
and Alan Charlish in Warsaw; Editing by Ramakrishnan M.)