CEE MARKETS-Currencies steady as rate-hike expectations support

By Anita Komuves May 28 (Reuters) - Central European currencies on Friday were stable after a week of gains, buoyed by expectations of policy tightening in the region, while the units remained unfazed by a firmer dollar ahead of crucial U.S. inflation data due later in the day. The Hungarian forint was trading at 348.15 per euro and was steady on Friday. The currency hit a nine-month high at 346.80 on Monday after the central bank last week flagged an interest rate hike to rein in inflation, before giving up some gains in a correction. "The forint will stay near these levels until the June rate meeting unless something happens on the international stage that negatively affects the rate," a Budapest-based FX trader said. The Czech crown also held stable on Friday after touching its strongest levels since March 2020 in the past week. On Thursday, Czech central banker Vojtech Benda said that the time when rates will rise has come much closer. After April CPI data in central Europe jumped above target ranges of central banks, rate hike expectations in the region lifted currencies. Rate hikes could start in June in Hungary or the Czech Republic, according to recent signals from policymakers and market pricing. The Polish zloty edged up 0.06% and was trading at 4.4882 per euro, on the stronger side of the important level of 4.5. The Polish central bank on Wednesday bought less than a third of government bonds that investors offered to sell, which caused an uptick in yields on Thursday. The 10-year government bond yield was 2 basis points lower on Friday. "Despite the lack of comments from the NBP we perceive these steps as initial signs that the central bank is starting to consider normalisation ahead, given the significant decline in downside risks to the economy," Morgan Stanley wrote in a note. Stocks in the region firmed, with Bucharest leading gains by adding 1.1%. Warsaw was up 0.62% while Budapest added 0.42%. Prague edged up 0.03%. CEE SNAPSHOT AT MARKETS 1042 CET CURRENCI ES Latest Previous Daily Change bid close change in 2021 EURCZK= Czech % EURHUF= Hungary % EURPLN= Polish % EURRON= Romania EURHRK= Croatia % EURRSD= Serbian % Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2021 .PX Prague 1165.28 1164.900 +0.03% +13.4 0 5% .BUX Budapes 45995.99 45802.61 +0.42% +9.23 t % .WIG20 Warsaw 2221.15 2207.47 +0.62% +11.9 5% .BETI Buchare 11428.89 11304.51 +1.10% +16.5 st 5% .SBITOP Ljublja <.SBITOP 1143.23 1139.88 +0.29% +26.9 na > 1% .CRBEX Zagreb 1929.48 1926.89 +0.13% +10.9 3% .BELEX1 Belgrad <.BELEX1 778.88 778.88 +0.00% +4.04 5 e 5> % .SOFIX Sofia 528.07 531.57 -0.66% +18.0 0% 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 interb ank Czech 0.68 0.93 1.31 0.38 Rep Hungary 1.26 1.50 1.66 0.91 Poland 0.33 0.49 0.69 0.21 Note: are for ask prices FRA quotes ********************************************** ****************