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CEE MARKETS-Currencies gain; crown supported by hawkish central bank

By Krisztina Than BUDAPEST, Sept 26 (Reuters) - Central European currencies gained Thursday as global sentiment improved, with the Czech crown supported by a hawkish central bank message on Wednesday that revived expectations interest rates would rise. The crown touched a five-and-a-half week high in early trading and was 0.1% higher at 0811 GMT. The Czech central bank voted 5-2 to leave its two-week repo rate at 2.00%, with dissenters backing a 25-basis- point increase. Governor Jiri Rusnok said the board was likely to return to the debate at its next meeting, in November. "The press conference (was) very hawkish – 2 votes for a hike. Not that shocking, probably, but the governor was saying that the debate about a hike was very balanced as inflationary risks to forecast seem to be prevailing," said Dalimil Vyskovsky, head of fixed income at Komercni Banka. Czech rate markets moved up 8 to 10 basis points. "Still, we have one rate cut priced in, in the 1Y horizon, which might prove too much," Vyskovsky said, adding that "odds for a hike in November have risen considerably." The Hungarian forint gained in early trade, then fell to 334.40 by 0834 GMT. The Hungarian central bank projected lower inflation and an economic slowdown and shifted to a more dovish stance on Tuesday, when it left its interest rates at the lowest in Central Europe. The forint slumped to a record low of 336.10 to the euro on Tuesday before the central bank meeting. On Thursday the bank released details of its quarterly inflation report, trimming its tax-adjusted core inflation forecasts and saying the country's current account had swung into a deficit in 2018 and would remain in a deficit at least until 2021, based on its current assumptions. "I think in the morning currencies firmed probably on the ... more positive news regarding the US-China trade war. This is what we can expect now: a bit of firming, and then buyers stepping in and the forint easing again," a dealer said in Budapest. She said the forint could trade between 333 and 336 in the next few days, then weaken past 336 and ease further. Stock markets across the region rose. Prague, Warsaw and Budapest were all trading about 0.4% higher amid cautious optimism over conciliatory comments on trade from China's commerce ministry. CEE SNAPSHOT AT MARKE 1011 CET TS CURRENCIES Latest Previous Daily Change bid close change in 2019 EURCZK= Czech <EURC 25.7610 25.7775 +0.06 -0.21% crown ZK=> % EURHUF= Hungary <EURH 333.9000 334.3800 +0.14 -3.84% forint UF=> % EURPLN= Polish <EURP 4.3770 4.3822 +0.12 -2.00% zloty LN=> % EURRON= Romanian <EURR 4.7460 4.7473 +0.03 -1.94% leu ON=> % EURHRK= Croatian <EURH 7.4050 7.4053 +0.00 +0.07% kuna RK=> % EURRSD= Serbian <EURR 117.3900 117.5200 +0.11 +0.78% dinar SD=> % Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2019 .PX Prague 1035.75 1031.060 +0.45 +4.99% 0 % .BUX Budapest <.BUX 40712.44 40553.92 +0.39 +4.02% > % .WIG20 Warsaw <.WIG 2167.37 2159.68 +0.36 -4.80% 20> % .BETI Bucharest <.BET 9517.54 9502.48 +0.16 +28.90 I> % % .SBITOP Ljubljana <.SBI 854.46 857.05 -0.30% +6.24% TOP> .CRBEX Zagreb <.CRB 1939.58 1934.67 +0.25 +10.91 EX> % % .BELEX1 Belgrade <.BEL 753.50 753.22 +0.04 -1.08% 5 EX15> % .SOFIX Sofia <.SOF 570.26 573.64 -0.59% -4.07% IX> BONDS Yield Yield Spread Daily (bid) change vs change Bund in Czech spread Republic CZ2YT=R 2-year <CZ2Y 1.3320 0.0140 +206b +2bps R T=RR> ps CZ5YT=R 5-year <CZ5Y 1.0910 -0.0080 +188b +0bps R T=RR> ps CZ10YT= 10-year <CZ10 1.3270 0.0060 +191b +0bps RR YT=RR ps > Poland PL2YT=R 2-year <PL2Y 1.4800 -0.0080 +221b +0bps R T=RR> ps PL5YT=R 5-year <PL5Y 1.8040 -0.0040 +259b +1bps R T=RR> ps PL10YT= 10-year <PL10 2.0270 -0.0130 +261b -2bps RR YT=RR ps > FORWA RATE AGREEMEN RD T 3x6 6x9 9x12 3M interba nk Czech Rep <CZKF 2.16 2.09 2.10 2.14 RA><P RIBOR => Hungary <HUFF 0.26 0.29 0.32 0.21 RA><B UBOR= > Poland <PLNF 1.73 1.68 1.65 1.72 RA><W IBOR= > Note: FRA are for ask quotes prices (Additional reporting by Jason Hovet and Robert Muller in Prague, Editing by)