CEE MARKETS-Forint, crown firm as investors await cbank rate meetings

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By Anita Komuves BUDAPEST, June 21 (Reuters) - The Hungarian forint and the Czech crown firmed on Monday as investors awaited central bank rate meetings in Budapest and Prague where policymakers are expected to become the first in the European Union to tighten policy since the pandemic. The Hungarian central bank holds its rate-setting meeting on Tuesday and the Czech central bank on Wednesday. Analysts polled by Reuters expect a 25 basis point hike in the main rate from both central banks. Expectations of rate hikes have underpinned forint and the Czech crown for weeks, though they both gave up some of those gains after the U.S. Federal Reserve said on Wednesday it could tighten policy sooner than expected, boosting the dollar. The Hungarian forint added 0.3% on Monday and was trading at 354.92 per euro. The currency suffered heavy losses last week, falling more than 2% and underperforming its regional peers. Some of that was due to the high degree of uncertainty ahead of the rate meeting, CIB Bank wrote in a note. "There are widely different market expectations about the amount of the rate hike, which unsettled markets." "In order to avoid negative market consequences, the Council needs to raise the one-week deposit rate to at least 0.9%, and make a correction in the base rate in line with that," CIB wrote. The Czech crown edged up 0.08% and was trading at 25.565 versus the common currency. The Polish zloty was up 0.18% and trading at 4.5455 to the euro, helped by fresh industrial output data showing a 29.8% year-on-year rise in May, above forecast. "The data should remind people of the solid foundations of the zloty, which should help mitigate the negative effects of the stronger USD on emerging markets," Konrad Bialas, chief economist at DM TMS Brokers wrote. Stock markets in Prague and Budapest edged up while Warsaw's stocks weakened 0.89%. Markets in Romania were closed for a holiday on Monday. CEE SNAPSHO AT MARKETS T 1055 CET CURRENC IES Latest Previous Daily Change bid close change in 2021 EURCZK= Czech EURHUF= Hungary 0 EURPLN= Polish EURRON= Romania EURHRK= Croatia EURRSD= Serbian 0 Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2021 .PX Prague 1162.86 1162.010 +0.07% +13.21 0 % .BUX Budapes 48154.7 48117.72 +0.08% +14.36 t 2 % .WIG20 Warsaw 2200.95 2220.68 -0.89% +10.94 % .BETI Buchare 11608.1 11608.18 +0.00% +18.38 st 8 % .SBITOP Ljublja <.SBITOP 1140.84 1145.22 -0.38% +26.64 na > % .CRBEX Zagreb 1988.50 1992.28 -0.19% +14.33 % .BELEX1 Belgrad <.BELEX1 776.01 777.37 -0.17% +3.66% 5 e 5> .SOFIX Sofia 552.97 551.89 +0.20% +23.56 % Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republi c CZ2YT=R s CZ5YT=R s CZ10YT= s Poland PL2YT=R s PL5YT=R s PL10YT= s FORWARD 3x6 6x9 9x12 3M interba nk Czech 0.78 1.05 1.39 0.44 Rep Hungary 1.50 1.78 1.93 0.93 Poland 0.35 0.53 0.72 0.21 Note: are for ask FRA prices quotes ********************************************* ***************** (Additional reporting by Alan Charlish in Warsaw; Editing by Andrew Heavens)

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