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CEE MARKETS-Czech markets price in rate hike for August after hawkish cenbank message

By Anita Komuves and Jason Hovet BUDAPEST/PRAGUE, May 7 (Reuters) - Czech markets increasingly bet an interest rate hike may come sooner rather than later, with the crown steadying on Friday following a big jump after the central bank governor signalled an increase in borrowing costs was certain this year. Other central European currencies eased a touch, while the Czech crown held onto its gains that came after central bank Governor Jiri Rusnok said on Thursday the bank could already begin a debate on tightening policy at its June meeting. Forward rate agreements in three months' time have climbed since Thursday, now indicating chances the bank is likely to deliver on a rate hike - becoming the first in the region to do so - in August, when new staff forecasts will be available. The Hungarian forint was hovering around its 200-day moving average near 358 per euro. "I don't expect the forint to significantly move in either direction today because investors are waiting for CPI data to be published next Tuesday, which could trigger bigger moves," a Budapest-based FX trader said. The central bank expects headline inflation to approach 5% in the second quarter, driven by fuel prices and tax changes, overshooting its 2%-4% target range. The bank pledged to prevent any sustained rise in inflation at its rate-setting meeting last week. The zloty edged lower on Friday after steep losses in the middle of the week. The currency has been under pressure ahead of a Supreme Court ruling due on May 11 concerning FX mortgages, which could result in major losses for banks. Stocks in the region firmed, with Warsaw leading gains. Prague added 0.7%. Shares in MONETA Money Bank climbed over 3% after the bank said it agreed with its biggest shareholder, PPF Group, on terms to combine their Czech lending assets in a 25.9 billion crown deal. Budapest's equities rose 0.22%. Oil and gas group MOL added 2.6% by 0835 GMT after posting better-than expected first-quarter results. CEE SNAPSHO AT MARKETS T 1123 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 1104.24 1096.510 +0.70 +7.51% 0 % .BUX Budapest 44569.2 44472.71 +0.22 +5.85% 7 % .WIG20 Warsaw 2078.33 2046.67 +1.55 +4.76% % .BETI Buchares 11562.6 11505.08 +0.50 +17.92 t 6 % % .SBITOP Ljubljan <.SBITOP 1070.29 1064.86 +0.51 +18.81 a > % % .CRBEX Zagreb 1933.63 1930.65 +0.15 +11.17 % % .BELEX1 Belgrade <.BELEX1 755.80 755.89 -0.01% +0.96% 5 5> .SOFIX Sofia 518.76 522.74 -0.76% +15.92 % Yield Yield Spread Daily (bid) change vs change Bund in Czech spread Republic CZ2YT=R 2-year ps CZ5YT=R 5-year ps CZ10YT= ps Poland PL2YT=R 2-year ps PL5YT=R 5-year ps PL10YT= ps FORWARD 3x6 6x9 9x12 3M interba nk Czech 0.58 0.88 1.20 0.36 Rep Hungary 0.96 1.13 1.30 0.79 Poland 0.28 0.32 0.41 0.21 Note: are for ask FRA prices quotes ********************************************* ***************** (Reporting by Anita Komuves in Budapes and Jason Hovet in Prague; Editing by Subhranshu Sahu)