CEE MARKETS-Dinar firms ahead of central bank meeting, bucks regional peers

* Serbian central bank seen holding fire, dinar firms

* Stocks, currencies ease as Chinese data ups risk aversion

* Hungary’s bond auction seen drawing good demand-trader

* Czech 2-year bond yield dips below Bund equivalent

BUDAPEST, Oct 13 (Reuters) – The dinar firmed slightly on Thursday ahead of a meeting of the Serbian central bank, bucking a regional downtrend after China’s release of weak trade figures depressed investors’ risk appetite. The dinar firmed 0.1 percent to 123.05 with Serbia’s central bank now widely expected to keep its 4-percent benchmark rate on hold. On Wednesday it purchased euros in the market to cap dinar gains. The forint fell the most, losing 0.3 percent against the euro by 0812 GMT, while the leu edged towards 3-month lows, easing 0.1 percent to 4.5035 on worries about a draft law on the conversion of Swiss franc mortgages. Poland’s Prime Minister Beata Szydlo said that a similar bill would not hit banks’ revenues, but his comments failed to buoy bank stocks and Warsaw’s bluechip index led a fall in the region, shedding 1.1 percent. Government bond prices mostly firmed alongside euro zone peers, with Hungarian bond yields dropping one basis point ahead of an auction due later in the day. Czech 2-year bond yields traded near record lows, dropping 9 basis points to -0.75 percent, below corresponding Bund yields, with the crown stuck at the central bank’s cap of 27 against euro. Central bank governor Jiri Rusnok reaffirmed a “hard commitment” late on Wednesday that it will not drop the floor on its crown range before the second quarter of 2017. The bank has bought billions of euros in the last few months to cap the crown’s value. “Flow into the crown looks strong and constant at the moment,” one dealer said.

CEE SNAP AT 1012

MARKETS SHOT CET CURRENCIES Late Prev Dail Chan

st ious y ge bid clos chan in e ge 2016 Czech <EURCZK 27.0 27.0 +0. -0.0 crown => 210 260 02% 9% Hungary <EURHUF 306. 305. -0.3 2.68 forint => 4400 5300 0% % Polish <EURPLN 4.30 4.30 +0. -1.0 zloty => 50 50 00% 9%

Romanian <EURRON 4.50 4.50 -0.0 0.34

leu => 35 01 8% %

Croatian <EURHRK 7.51 7.50 -0.0 1.72

kuna => 00 81 3% % Serbian <EURRSD 123. 123. +0. -1.2 dinar => 0300 1300 08% 7% Note: calcula prev clos 1800 daily ted ious e at CET change from

STOC KS Late Prev Dail Chan

st ious y ge

clos chan in

e ge 2016 Prague 886. 890. -0.4 -7.2 97 74 2% 5% Budapest 2831 2839 -0.3 +18 0.06 6.87 1% .35% Warsaw <.WIG20 1741 1760 -1.0 -6.3 > .46 .43 8% 3% Buchares 6899 6919 -0.2 -1.4 t .69 .39 8% 9% Ljubljan <.SBITO 725. 727. -0.3 +4. a P> 14 62 4% 16% Zagreb <.CRBEX 1991 1990 +0. +17 > .16 .88 01% .85% Belgrade <.BELEX 637. 634. +0. -1.0 15> 64 86 44% 0% Sofia <.SOFIX 510. 509. +0. +10 > 62 24 27% .79%

BOND S Yiel Yiel Spre Dail

d d ad y (bid chan vs chan ) ge Bund ge

in

Czech spre Republic ad 2-year <CZ2YT= -0.6 0.00 +00 +1b RR> 59 3 0bps ps 5-year <CZ5YT= -0.1 -0.0 +03 +0b RR> 34 15 5bps ps <CZ10YT 0.32 -0.0 +02 +0b 10-year =RR> 8 16 8bps ps

Poland

2-year PL2YT= 1.77 -0.0 +24 +1b RR> 2 03 3bps ps 5-year <PL5YT= 2.45 -0.0 +29 +0b RR> 2 17 4bps ps <PL10YT 3.04 -0.0 +30 +1b 10-year =RR> 5 06 0bps ps

FORWARD RATE AGREEMENT

3×6 6×9 9×12 3M

inte rban k

Czech <CZKFRA 0.28 0.25 0.22 0 Rep ><PRIBO

R=>

Hungary <HUFFRA 0.78 0.76 0.77 0.87 ><BUBOR

=>

Poland <PLNFRA 1.73 1.73 1.73 1.72 ><WIBOR 75 75 5

=>

Note: are for FRA ask quotes prices ***************************************** *********************

(Additional reporting by Jason Hovet and Robert Muller in Prague; Editing by Louise Ireland)

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