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UPDATE 1-CEE MARKETS-Forint firms as c.bank unexpectedly raises one-week deposit rate

 (Recasts with Hungarian c.bank move)
    WARSAW, Sept 24 (Reuters) - The Hungarian forint
firmed on Thursday, after the central bank unexpectedly raised
the interest rate on its one-week deposit facility by 15
basis points to 0.75%.
    The forint had weakened in recent weeks due to the impact of
a second coronavirus wave on economic recovery and rising
inflation. But the rate move lifted it immediately from
five-month-lows around 365 versus the euro to around 363.5.

    Market players said, however, that trend may not last. 
    At 1029 GMT the forint was 0.42% stronger on the day at
363.78.
    Other Central European currencies were softer, taking a hit
from a global risk sell-off on fears that rising coronavirus
cases are slowing economic recovery.
    Europe has seen a surge, with Poland reporting a new record
daily number of cases on Thursday. In the Czech Republic, the
surge has been growing at the second fastest rate in Europe when
adjusted for population, behind only Spain.
    "The epicentre of negative effects of the second wave of the
coronavirus is in Europe. CEE currencies must compensate for
expected reduced demand from Europe given the worsening business
sentiment there," said Piotr Bartkiewicz, an economist at Pekao
SA.
    At 1029 GMT the Polish zloty was 0.40% softer
against the euro at 4.5285, the Czech crown was 0.17%
weaker at 26.9870 and the Romanian leu was 0.05%
weaker at 4.8740.
    The crown did not get any strong impulse from the Czech
National Bank (CNB) on Wednesday after rate setters left the key
rate unchanged at 0.25% as expected.
    Stocks mostly fell, taking their cue from global markets
rattled by rising infection rates and fading hopes of fresh
stimulus for the U.S. economy.
    The main indices in Budapest and Warsaw fell
1.53% and 0.65% respectively, while Prague's PX index was
broadly flat.
    Czech 10-year bond yields fell just under 2
basis points to 0.865%, while Polish 10-year yields
fell almost 3 basis points to 1.335%.
    "...in the case of 10-year papers it will not be easy to
break the 1.30% level, despite positive sentiment in the global
debt market," PKO BP analysts in Warsaw said in a note.
    "Therefore, it seems more probable that the yields will
return to 1.40% on the longer end of the curve."
    
    
           CEE       SNAPSHO   AT                      
           MARKETS   T        1229              
                              CET               
                     CURRENC                           
                     IES                        
                     Latest   Previou  Daily    Change
                              s                 
                     bid      close    change   in 2020
 Czech     <EURCZK=  26.9870  26.9400   -0.17%   -5.76%
 crown     >                                    
 Hungary   <EURHUF=  363.780  365.300   +0.42%   -8.97%
 forint    >               0        0           
 Polish    <EURPLN=   4.5285   4.5102   -0.40%   -6.01%
 zloty     >                                    
 Romanian  <EURRON=   4.8740   4.8714   -0.05%   -1.76%
 leu       >                                    
 Croatian  <EURHRK=   7.5490   7.5505   +0.02%   -1.37%
 kuna      >                                    
 Serbian   <EURRSD=  117.500  117.600   +0.09%   +0.06%
 dinar     >               0        0           
 Note:     calculated from             1800            
 daily                                 CET      
 change Latest   Previou  Daily    Change
                              s                 
                              close    change   in 2020
 Prague               861.93  861.690   +0.03%  -22.74%
                                    0           
 Budapest            32018.9  32515.3   -1.53%  -30.52%
                           5        9           
 Warsaw              1674.40  1685.40   -0.65%  -22.12%
 Buchares            9063.00  9110.46   -0.52%   -9.16%
 t                                              
 Ljubljan  <.SBITOP   839.99   834.77   +0.63%   -9.27%
 a         >                                    
 Zagreb              1629.57  1645.58   -0.97%  -19.23%
 Belgrade  <.BELEX1   688.11   688.57   -0.07%  -14.17%
           5>                                   
 Sofia                424.55   425.11   -0.13%  -25.27%
                                                       
                     Yield    Yield    Spread   Daily
                     (bid)    change   vs Bund  change
                                                in
 Czech                                          spread
 Republic                                       
   2-year  <CZ2YT=R   0.0710  -0.0100   +078bp    -1bps
           R>                                s  
   5-year  <CZ5YT=R   0.4760  -0.0850   +120bp    -6bps
           R>                                s  
           <CZ10YT=   0.8650  -0.0180   +139bp    +0bps
 10-year   RR>                               s  
 Poland                                                
   2-year  <PL2YT=R   0.0480  -0.0510   +075bp    -5bps
           R>                                s  
   5-year  <PL5YT=R   0.6450  -0.0260   +137bp    +0bps
           R>                                s  
           <PL10YT=   1.3350  -0.0290   +186bp    -1bps
 10-year   RR>                               s  
           FORWARD                                     
                     3x6      6x9      9x12     3M
                                                interba
                                                nk
 Czech                  0.32     0.33     0.35     0.34
 Rep       <PRIBOR=                             
           >                                    
 Hungary                1.01     1.14     1.25     0.65
                                                
 Poland                 0.19     0.19     0.19     0.22
                                                
 Note:     are for ask                                 
 FRA       prices                               
 quotes                                         
 *********************************************         
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 (Reporting by Alan Charlish in Warsaw, Jason Hovet in Prague,
Anita Komuves in Budapest, Luiza Ilie in Bucharest; Editing by
Ramakrishnan M. and Andrew Cawthorne)
  
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