CEE MARKETS-Currencies ease as investors eye ECB meeting

By Anita Komuves BUDAPEST, Oct 28 (Reuters) - The Polish zloty and the Hungarian forint eased in low liquidity on Thursday as market participants waited for a meeting of the European Central Bank later in the day to hear its comments about the inflation outlook. "Everyone is waiting for the ECB meeting, though we do not expect big surprises," an FX trader in Budapest said. "It's next week's Fed meeting that could move CEE markets more." The difficulty for the ECB is that it wants to maintain its ultra-dovish stance to boost the region's economy, but at the same time, it must face up to inflation expectations that are running at seven-year highs above 2%. Central banks in the CEE region have already raised interest rates to tackle rising inflation. The forint eased 0.08% and was trading at 363.65 per euro, off recent lows after bouncing back from multi-month lows in the previous session in what analysts and traders called a correction. "The euro-forint rate has risen too much recently, all technical indicators were pointing towards a correction," another trader said. The currency was put under pressure in the past week by a strengthening dollar and a 15-basis-point rate hike by the central bank last Tuesday that some investors considered too small. The Polish zloty slid 0.21% to trade at 4.6295 versus the common currency, adding to its losses from the previous session. "The zloty continues to be pressured, and liquidity is so low that the rate is easily moved," a trader in Warsaw said. Besides global factors such as a firming dollar, the currency is weakened by Warsaw's dispute with the European Union over rule-of-law issues and concerns that this will lead to Poland missing out on billions in EU funds. The European Union's top court said on Wednesday that Poland must pay 1 million euros ($1.16 million) a day for maintaining a disciplinary chamber for judges. Stock markets in the region were mixed, with Budapest down 0.93% while Bucharest added 0.19%. Warsaw's equities slid 0.19%. Markets in the Czech Republic were closed for a national holiday on Thursday. CEE SNAPSHO AT MARKETS T 1025 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 1338.64 1338.640 +0.00% +30.33 0 % .BUX Budapes 54271.9 54780.65 -0.93% +28.89 t 7 % .WIG20 Warsaw 2400.27 2404.82 -0.19% +20.98 % .BETI Buchare 12773.7 12748.97 +0.19% +30.27 st 1 % .SBITOP Ljublja <.SBITOP 1189.68 1184.80 +0.41% +32.06 na > % .CRBEX Zagreb 2032.11 2027.40 +0.23% +16.84 % .BELEX1 Belgrad <.BELEX1 791.37 793.49 -0.27% +5.71% 5 e 5> .SOFIX Sofia 575.16 575.61 -0.08% +28.52 % 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 3.48 3.61 3.60 2.15 Rep Hungary 2.80 3.12 3.37 2.02 Poland 1.65 2.07 2.48 0.72 Note: are for ask FRA prices quotes ********************************************* ***************** (Editing by Subhranshu Sahu)