CEE MARKETS-Crown firms on ECB comments, Budapest stocks hit record high

By Anita Komuves BUDAPEST, June 11 (Reuters) - The Czech crown firmed to its strongest level in 15 months on Friday, while other regional currencies held steady near recent highs, supported by positive sentiment after the European Central Bank raised its growth forecast on Thursday. The ECB on raised its growth and inflation projections, while pledging a steady flow of stimulus for now. Stocks in the region were mixed, with Budapest gaining 0.44% by 0908 GMT after hitting a fresh record high earlier in the session. Prague edged down 0.15% while Warsaw slid 0.38%. Bucharest added 0.98%. Currencies were also supported by rate hike expectations as the central European region is facing the strongest inflation rise in the EU as economies recover from the COVID-19 pandemic. May inflation numbers published this week came in below forecasts in Hungary and the Czech Republic. However, that did not lower expectations of policy tightening as in Hungary's case the reading was well above the central bank's target range. Romania's consumer price inflation quickened to 3.75% on the year in May from April's 3.24%, above market expectations, data showed on Friday. Markets are pricing in a rate hike for June or August in the Czech Republic while the central bank of Hungary reiterated on Tuesday that it could become the first in the European Union to launch a tightening cycle this month. The Czech crown was up 0.17% and trading at 25.300 per euro, firming past important technical levels. The Polish zloty was stable ahead of Central Bank Governor Adam Glapinski's press conference at 1300 GMT. Glapinski "could clear the sky whether the rejection of most of the bids at the second auction in May was a start of the tapering of the QE program," Erste Bank wrote in a note. The Polish central bank kept rates on hold on Wednesday and did not deliver hints of a more hawkish bias, which analysts expected to weigh on the zloty. CEE SNAPSHO AT MARKETS T 1108 CET CURRENC IES Latest Previous Daily Change bid close change in 2021 EURCZK= Czech % EURHUF= Hungary 0 % EURPLN= Polish % EURRON= Romanian EURHRK= Croatian % EURRSD= Serbian 0 % Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2021 .PX Prague 1177.88 1179.610 -0.15% +14.6 0 8% .BUX Budapest 48688.7 48475.07 +0.44% +15.6 5 3% .WIG20 Warsaw 2228.44 2236.89 -0.38% +12.3 2% .BETI Buchares 11476.7 11365.47 +0.98% +17.0 t 3 4% .SBITOP Ljubljan <.SBITOP 1136.35 1131.91 +0.39% +26.1 a > 4% .CRBEX Zagreb 1963.84 1959.77 +0.21% +12.9 1% .BELEX1 Belgrade <.BELEX1 782.56 781.87 +0.09% +4.54 5 5> % .SOFIX Sofia 545.31 541.56 +0.69% +21.8 5% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT=R 2-year s CZ5YT=R 5-year s CZ10YT= s Poland PL2YT=R 2-year s PL5YT=R 5-year s PL10YT= s FORWARD 3x6 6x9 9x12 3M interb ank Czech 0.74 0.99 1.29 0.42 Rep Hungary 1.31 1.57 1.73 0.93 Poland 0.28 0.44 0.60 0.21 Note: are for ask FRA prices quotes ********************************************** **************** (Additional reporting by Jason Hovet in Prague and Agnieszka Barteczko in Warsaw; Editing by Giles Elgood)

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