CEE MARKETS-Czech crown leads FX slide as COVID-19 cases surge

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Feb 25 (Reuters) - Central European currencies weakened on Thursday amid worries over the third wave of the coronavirus pandemic, with the Czech crown losing most as the situation in the country worsened. The Czech government met late into the evening on Wednesday about tightening measures to combat one of the world's fastest-growing infection rates and ease pressure on hard-hit hospitals. It will meet again later on Thursday to decide on measures, which could include stricter limits on people's movements. "In light of the current negative trend in the coronavirus pandemic in the country, the crown market is starting to discount some of its exaggerated expectations for interest rate growth," Komercni Banka said. At 0954 GMT the crown was 0.39% weaker against the euro at 26.11. The Hungarian forint was 0.26% weaker at 360.47 and the Polish zloty was 0.17% weaker at 4.5155. On Wednesday, Poland announced tighter curbs in one region of the country that has been hit hard by the virus, and said travellers from the Czech Republic and Slovakia would need to show a negative test result or go into quarantine. In Hungary, Prime Minister Viktor Orban said on Wednesday that it was too early to ease restrictions. "The CEE currencies were burdened by the epidemic situation, where the related restrictions were maintained or tightened," PKO BP analysts said in a note. Polish 10-year yields rose 7.8 basis points to 1.493%, following global fixed income markets where bond yields have risen on expectations of higher inflation. "There is a strong inflation trade worldwide and our market is following that," said Piotr Poplawski, senior economist at ING in Warsaw. Czech 10-year yields were little changed at 1.623% Stocks followed global markets higher, with the main indices in Prague, Budapest and Warsaw up 0.96%-1.45%. CEE SNAPSHO AT MARKETS T 1054 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 1068.31 1053.060 +1.45% +4.01% 0 .BUX Budapest 43694.5 43183.45 +1.18% +3.77% 5 .WIG20 Warsaw 1956.56 1937.90 +0.96% -1.38% .BETI Bucharest 10279.0 10188.98 +0.88% +4.83% 4 .SBITOP Ljubljana <.SBITOP 970.16 971.16 -0.10% +7.69% > .CRBEX Zagreb 1839.41 1842.89 -0.19% +5.76% .BELEX1 Belgrade <.BELEX1 752.08 752.82 -0.10% +0.46% 5 5> .SOFIX Sofia 495.48 498.02 -0.51% +10.71 % Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT=R 2-year s CZ5YT=R 5-year s CZ10YT= 10-year s Poland PL2YT=R 2-year s PL5YT=R 5-year s PL10YT= 10-year s FORWARD 3x6 6x9 9x12 3M interba nk Czech Rep 0.43 0.61 0.85 0.36 Hungary 0.94 1.09 1.25 0.76 Poland 0.26 0.30 0.32 0.21 Note: FRA are for ask quotes prices *********************************************** *************** (Reporting by Alan Charlish in Warsaw, Jason Hovet in Prague and Anita Komuves in Budapest; Editing by Ramakrishnan M.)