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CEE MARKETS-Hungarian forint firms on slowing inflation; stocks mixed

    BUCHAREST, Oct 8 (Reuters) - The Hungarian forint
outperformed its central European peers on Thursday as headline
inflation slowed more than expected in September, while stocks
across the region were mixed.
    Headline inflation slowed to an annual 3.4% in September,
below a 3.9% forecast, data showed, providing relief to the
central bank, which faces the challenge of rising inflation at a
time when the COVID-19 pandemic has plunged the economy into
recession. 
    By 0910 GMT, the forint firmed 0.3% versus the
euro at 357.8700. 
    "This is a positive surprise, which made the forint
strengthen immediately," a Budapest-based FX trader said.
    "The central bank got some breathing space, but investors
are also watching events in the U.S. and coronavirus
statistics."
    The bank unexpectedly raised the interest rate on its
one-week deposit facility by 15 basis points to 0.75% on Sept.
25, which helped buoy the weakening forint. 
    It last used the one-week deposit rate to support the
currency on April 1, when it plunged to all-time lows of near
370 versus the euro during the first wave of the pandemic.

    Elsewhere in the region, the Czech crown was down
0.2% against the euro at 27.1250 as the European Union state
reported 5,335 new coronavirus cases on Wednesday, its highest
one-day tally since the pandemic started.
    Czech retail sales were flat year-on-year in August, against
market expectations of a rise.
    "As the curve of new COVID cases has not flattened yet, we
do not expect the koruna to outperform EMFX," Citibank said in a
research note. 
    "Hence, we expect the crown to remain around spot levels in
the near-term before reaching stronger levels once the local
epidemic situation, EURUSD, US election outcome and COVID
vaccine make it achievable."
    The Polish zloty was 0.3% weaker on the day. 
    The Polish central bank left its benchmark interest rate
unchanged at a record low of 0.1% on Wednesday, as expected. 
    The bank said economic recovery may slow in coming months,
and could be limited by the lack of visible and more durable
zloty exchange rate adjustment to the global pandemic-driven
shock and its monetary policy easing.
    Stocks were mixed, with Bucharest's blue chip index
firming 0.5% while Warsaw's and Budapest's
weakened 0.5% and 0.4%, respectively.
    
           CEE       SNAPSHO   AT                      
           MARKETS   T        1139              
                              CET               
                     CURRENC                           
                     IES                        
                     Latest   Previou  Daily    Change
                              s                 
                     bid      close    change   in 2020
 Czech     <EURCZK=  27.1250  27.0850   -0.15%   -6.24%
 crown     >                                    
 Hungary   <EURHUF=  357.750  358.890   +0.32%   -7.44%
 forint    >               0        0           
 Polish    <EURPLN=   4.4890   4.4785   -0.23%   -5.18%
 zloty     >                                    
 Romanian  <EURRON=   4.8745   4.8755   +0.02%   -1.77%
 leu       >                                    
 Croatian  <EURHRK=   7.5670   7.5675   +0.01%   -1.61%
 kuna      >                                    
 Serbian   <EURRSD=  117.460  117.560   +0.09%   +0.09%
 dinar     >               0        0           
 Note:     calculated from             1800            
 daily                                 CET      
 change Latest   Previou  Daily    Change
                              s                 
                              close    change   in 2020
 Prague               872.93  873.180   -0.03%  -21.75%
                                    0           
 Budapest            33428.0  33561.0   -0.40%  -27.46%
                           7        5           
 Warsaw              1728.43  1736.61   -0.47%  -19.61%
 Buchares            8916.83  8869.71   +0.53%  -10.63%
 t                                              
 Ljubljan  <.SBITOP   837.99   837.57   +0.05%   -9.49%
 a         >                                    
 Zagreb              1613.94  1611.53   +0.15%  -20.00%
 Belgrade  <.BELEX1   693.43   695.46   -0.29%  -13.50%
           5>                                   
 Sofia                423.39   422.00   +0.33%  -25.48%
                                                       
                     Yield    Yield    Spread   Daily
                     (bid)    change   vs Bund  change
                                                in
 Czech                                          spread
 Republic                                       
   2-year  <CZ2YT=R   0.0970  -0.0230   +079bp    -2bps
           R>                                s  
   5-year  <CZ5YT=R   0.5390  -0.0600   +124bp    -5bps
           R>                                s  
           <CZ10YT=   0.9310  -0.0320   +144bp    -2bps
 10-year   RR>                               s  
 Poland                                                
   2-year  <PL2YT=R   0.0100  -0.0370   +071bp    -3bps
           R>                                s  
   5-year  <PL5YT=R   0.5840  -0.0020   +129bp    +1bps
           R>                                s  
           <PL10YT=   1.3300  -0.0160   +184bp    +0bps
 10-year   RR>                               s  
           FORWARD                                     
                     3x6      6x9      9x12     3M
                                                interba
                                                nk
 Czech                  0.31     0.31     0.35     0.35
 Rep       <PRIBOR=                             
           >                                    
 Hungary                0.97     1.01     1.04     0.76
                                                
 Poland                 0.21     0.21     0.22     0.22
                                                
 Note:     are for ask                                 
 FRA       prices                               
 quotes                                         
 *********************************************         
 *****************                              
 
 (Reporting by Luiza Ilie in Bucharest, Anita Komuves in
Budapest, Alan Charlish in Warsaw,  Jason Hovet and Robert
Muller in Prague;  Editing by Subhranshu Sahu)
  
 
 
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