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CEE MARKETS-Crown, forint extend gains after cenbanks hike rates

    PRAGUE, June 24 (Reuters) - The Czech crown and Hungarian
forint extended gains on Thursday, after both the countries'
central banks initiated measures towards monetary policy
tightening this week, while central European stock markets also
edged higher.
    On Wednesday, the Czech National Bank (CNB) raised its
interest rate for the first time since just before the
coronavirus hit central Europe in early 2020 and signalled
possible increases at upcoming meetings this year.
    The move came a day after the National Bank of Hungary
lifted its base rate and became the first central bank in the
European Union to start policy tightening in the aftermath of
the pandemic.
    Central Europe is facing stronger inflationary pressures
than the euro zone or elsewhere in Europe, putting central banks
on alert. But unlike in the Czech Republic or Hungary, Poland's
central bank has so far struck a more dovish tone.
    Danske Bank said, though, it saw a potential pivot coming
from the Polish bank in July, which would boost Poland's zloty.
Danske recommended short euro against the zloty.
    The zloty trailed the crown and forint and was
flat at 4.524 per euro. The crown added 0.1% to 25.345
to the euro to touch a two-week high and the forint
added 0.3% to 349.60.
    Czech rates markets continued to climb.
    "Unless we see stronger crown appreciation, it looks like
the August meeting will bring policy rates higher again,
potentially followed by another hike in November," Citi said.
    "While... a higher risk of more front-loaded policy
normalisation are likely to increase the shorter end of the
Czech interest rate curve, causing flattening, we think the
August CNB meeting may change this trend."
    In Hungary, the forint added to gains after the central bank
also signalled its first hike would be followed by others.
    "The central bank's communication about the start of the
rate hike cycle was so clear and unambiguous that it ended up
boosting the forint," a Budapest-based trader said, adding that
the forint would likely continue to hover around 350 but could
firm to 347 if the global mood gave it a boost.
    On stock markets, Warsaw led with a 0.6% rise,
followed by Budapest, up 0.4%, following global moves.
    In Prague, shares in O2 Czech Republic fell over
3%, after its main shareholder PPF lifted its stake to over 90%
and announced its intention to squeeze out remaining
shareholders.
    
                   CEE      SNAPSHO   AT                      
                   MARKETS  T        1151              
                                     CET               
                                                              
                   CURRENC                                    
                   IES                                 
                            Latest   Previou  Daily    Change
                                     s                 
                            bid      close    change   in 2021
 EURCZK  Czech     <EURCZK  25.3450  25.3800   +0.14%   +3.49%
 =       crown     =>                                  
 EURHUF  Hungary   <EURHUF  349.600  350.705   +0.32%   +3.75%
 =       forint    =>             0        0           
 EURPLN  Polish    <EURPLN   4.5240   4.5259   +0.04%   +0.78%
 =       zloty     =>                                  
 EURRON  Romanian  <EURRON   4.9242   4.9260   +0.04%   -1.20%
 =       leu       =>                                  
 EURHRK  Croatian  <EURHRK   7.5010   7.4983   -0.04%   +0.62%
 =       kuna      =>                                  
 EURRSD  Serbian   <EURRSD  117.510  117.585   +0.06%   +0.05%
 =       dinar     =>             0        0           
         Note:     calcula                    1800            
         daily     ted                        CET      
         change    from STOCKS                                     
                            Latest   Previou  Daily    Change
                                     s                 
                                     close    change   in 2021
 .PX     Prague             1165.04  1161.99   +0.26%   +13.43
                                          00                 %
 .BUX    Budapest           48824.8  48624.3   +0.41%   +15.95
                                  8        2                 %
 .WIG20  Warsaw    <.WIG20  2246.93  2233.70   +0.59%   +13.25
                   >                                         %
 .BETI   Buchares           11628.7  11592.7   +0.31%   +18.59
         t                        4        4                 %
 .SBITO  Ljubljan  <.SBITO  1139.64  1132.05   +0.67%   +26.51
 P       a         P>                                        %
 .CRBEX  Zagreb    <.CRBEX  1994.12  1988.49   +0.28%   +14.65
                   >                                         %
 .BELEX  Belgrade  <.BELEX   773.60   774.21   -0.08%   +3.34%
 15                15>                                 
 .SOFIX  Sofia     <.SOFIX   556.44   550.18   +1.14%   +24.34
                   >                                         %
                                                              
                   BONDS                                      
                            Yield    Yield    Spread   Daily
                            (bid)    change   vs Bund  change
                                                       in
         Czech                                         spread
         Republic                                      
 CZ2YT=    2-year  <CZ2YT=   0.3570   0.0000   +100bp    +0bps
 RR                RR>                              s  
 CZ5YT=    5-year  <CZ5YT=   1.7030   0.0100   +227bp    +0bps
 RR                RR>                              s  
 CZ10YT            <CZ10YT   1.7820  -0.0330   +195bp    -4bps
 =RR     10-year   =RR>                             s  
         Poland                                               
 PL2YT=    2-year  <PL2YT=   0.4200   0.0420   +107bp    +4bps
 RR                RR>                              s  
 PL5YT=    5-year  <PL5YT=   1.4020   0.0250   +197bp    +2bps
 RR                RR>                              s  
 PL10YT            <PL10YT   1.8230   0.0200   +199bp    +1bps
 =RR     10-year   =RR>                             s  
                                                              
                   FRA                                        
                            3x6      6x9      9x12     3M
                                                       interba
                                                       nk
         Czech     <CZKFRA     0.92     1.33     1.59     0.46
         Rep       ><PRIBO                             
                   R=>                                 
         Hungary   <HUFFRA     1.51     1.83     1.99     1.04
                   ><BUBOR                             
                   =>                                  
         Poland    <PLNFRA     0.37     0.59     0.82     0.21
                   ><WIBOR                             
                   =>                                  
         Note: FRA quotes                                     
         are for ask                                   
         prices                                        
         ***********************************                  
         ***************************                   
                                                              
    

 (Reporting by Jason Hovet in Prague, Anita Komuves in Budapest,
and Alan Charlish in Warsaw; Editing by Rashmi Aich)
  
 
 
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