UPDATE 1-CEE MARKETS-Forint firms after bigger-than-expected Hungarian rate hike

(Updates with Hungary cenbank decision, forint reaction, trader comment) By Anita Komuves BUDAPEST, Jan 25 (Reuters) - The Hungarian forint firmed on Tuesday after the central bank raised its base rate by 50 basis points, more than expected, while Russia-Ukraine tensions continued to cast a pall over Central European markets. The National Bank of Hungary (NBH) raised its base rate to 2.9% to battle inflation. The bank also hiked its overnight deposit rate by 50 bps to 2.9% and increased the top of its interest rate corridor to 4.9%. The Hungarian forint firmed after the decision, and was up 0.56% on the day and trading at 359.65 by 1335 GMT. The 50-basis-point hike surprised markets, which helped the forint firm, two FX traders in Budapest said. "The big question now is what happens to the one-week deposit rate and what the bank says about that in its statement," one trader said. "If the bank says that the one-week rate stays unchanged, that could hurt the forint." The NBH publishes its statement at 1400 GMT and will hold a press conference. The NBH left its one-week deposit rate unchanged at 4% at its weekly tenders in the past three weeks, halting a series of rate hikes. The one-week rate is used to tackle short-term market volatility. Analysts polled by Reuters expect the one-week deposit rate to rise to 4.6% by the end of the second quarter. Hungarian government bond yields were not immediately moved after the decision, a fixed-income trader in Budapest said. The yield on the 10-year bond was about 4.77%. Elsewhere in the region, currencies and equities were mixed following a sharp global selloff in the previous session due to geopolitical tensions. "Financial markets remain under the influence of increased risk aversion related to the threat of a military attack by Russia on Ukraine," Bank Millennium wrote in a client note. Russia has massed tens of thousands of troops near Ukraine's borders, but denies that it plans to invade the country. Prague's equities added 0.82%, while Budapest slid 0.28%. Warsaw gained 0.94% and Bucharest was 0.78% lower. The Czech crown gained 0.44% and was trading at 24.510 per euro, regaining some lost ground after weakening sharply in late trading on Monday to its lowest since Jan. 6. "High volatility seems to be the only consistent theme right now," Komercni Banka rates trader Marek Lesko said in a note. The Polish zloty slid 0.02% to 4.5742 versus the common currency, extending its losses from the previous session. The Romanian leu edged down. CEE SNAPSH AT MARKETS OT 1435 CET CURREN CIES Latest Previo Daily Change us bid close change in 2022 EURCZK Czech 0 0 % EURHUF Hungary 00 00 % EURPLN Polish EURRON Romania EURHRK Croatia EURRSD Serbian 00 00 % Note: calculated from 1800 daily CET change Latest Previo Daily Change us close change in 2022 .PX Prague 1402.6 1391.2 +0.82 6 900 % .BUX Budapes 51183. 51325. -0.28% +0.91% t 88 34 .WIG20 Warsaw <.WIG20 2190.7 2170.3 +0.94 -3.36% > 0 6 % .BETI Buchare 12738. 12838. -0.78% -2.47% st 44 37 .SBITO Ljublja <.SBITO 1270.4 1297.9 -2.12% +1.19% P na P> 5 1 .CRBEX Zagreb <.CRBEX 2121.4 2109.8 +0.55 +2.03% > 6 3 % .BELEX Belgrad <.BELEX 859.33 859.71 -0.04% +4.70% 15 e 15> .SOFIX Sofia <.SOFIX 607.87 609.94 -0.34% -4.37% > Yield Yield Spread Daily (bid) change vs change Bund in Czech spread Republi c CZ2YT= ps CZ5YT= ps CZ10YT ps Poland PL2YT= ps PL5YT= 0 ps PL10YT 0 ps FORWARD 3x6 6x9 9x12 3M interban k Czech Hungary Poland Note: are for ask FRA prices quotes **************************************** ********************** (Additional reporting by Jason Hovet in Prague and Alan Charlish in Warsaw; Editing by Aditya Soni and Krishna Chandra Eluri)