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CEE MARKETS-OTP boosts Budapest stock index, currencies retreat

* Hopes for good earnings boosts OTP Bank, Budapest share index * CEE markets in cautious mood after fall in Asian bourses * Hungary's Oct PMI shows pick-up, in contrast with Czechs, Poland * Leu flat, Romanian central bank not seen under pressure to hike By Sandor Peto BUDAPEST, Nov 5 (Reuters) - Budapest's main stock index tested 5-month highs on Monday, driven by hopes for a good earnings report from OTP, Central Europe's biggest independent lender.

Investors in the region's emerging markets were otherwise cautious after a fall in Asian shares and the yuan due to fears of a continuation of the U.S.-China trade war.

Strong U.S. jobs data released on Friday also knocked back the euro, reversing a firming of Central European currencies on Friday.

But the shares of OTP rose as much as 3 percent, helping the bourse index approach its highest levels since early June.

While Hungarian markets were closed from Thursday to Sunday, the European Bank for Reconstruction and Development (EBRD) increased its growth forecasts for Hungary, Equilor brokerage analyst Balint Kovacs said.

"Also, OTP is expected to report strong (third-quarter) results on Friday," Kovacs said, adding that the share price, after breaking through resistance at 10,400 forints ($36.74), was halted by its 200-day moving average at 10.600 forints.

Adding to the positive factors, Hungary's Purchasing Managers' Index (PMI) data showed a sharp pick-up in economic activity in October to 57.3 from 54.1 in September, in contrast to a slowdown indicated by Czech and Polish data released last week.

However, the forint retreated in early trade, shedding 0.2 percent to hit 322.5 versus the euro at 0832 GMT, off Friday's 3-month highs of 321.

"Local players were on holiday on Friday. The forint retreated as they returned," one Budapest-based dealer said.

The region's currencies had been helped late last week by a strengthening of the euro, but Friday's robust U.S. jobs boosted expectations for further Federal Reserve rate hikes, and weakened the single currency.

The zloty was firmer by 0.15 percent versus the euro on Monday, but off a one-week high set on Friday.

Friday's Polish PMI figures showed economic activity was close to stalling, underpinning expectations that the Polish central bank could maintain its loose policy stance at its meeting on Wednesday.

The slowdown did not weigh on Polish assets as the figures were not in line with alternative business surveys, analysts said.

"We believe the slowdown in Poland will be less sharp than the PMI implies," Santander bank analysts said in a note.

The leu was steady ahead of a meeting of Romania's central bank on Tuesday where it is expected to keep rates on hold.

"If the government sticks to its proposal of freezing wages in the public sector... the central bank will get much more room for manoeuvre and will wait for its next rate hike until the ECB takes action or signals tightening," Erste analysts said in a note.

CEE SNAPSHOT AT MARKETS 1032 CET CURRENCI ES Latest Previous Daily Change bid close change in 2018 Czech Hungary Polish Romanian Croatian Serbian Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2018 Prague 1070.38 1067.730 +0.25% -0.72% 0 Budapest 37435.16 37155.21 +0.75% -4.93% Warsaw 2201.13 2197.68 +0.16% -10.57% Bucharest 8570.75 8563.37 +0.09% +10.54% Ljubljana <.SBITOP 808.51 803.66 +0.60% +0.26% > Zagreb 1776.80 1769.80 +0.40% -3.59% Belgrade <.BELEX1 743.16 742.68 +0.06% -2.19% 5> Sofia 596.21 596.80 -0.10% -11.99% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year 5-year 10-year Poland 2-year 5-year 10-year FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 2.05 2.20 2.35 1.96 (PRIBOR= ) Hungary 0.35 0.61 0.98 0.16 Poland 1.77 1.80 1.87 1.72 Note: FRA are for ask prices quotes ************************************************* ************* ($1 = 283.0600 forints) (Additional reporting by Luiza Ilie in Bucharest Editing by Gareth Jones)