CEE MARKETS-Forint jumps to three-week high after Hungarian deposit rate hike

By Anita Komuves BUDAPEST, Dec 2 (Reuters) - The Hungarian forint firmed to a three-week high on Thursday after the central bank hiked its one-week deposit rate, raising rates for the fifth time in under three weeks as it is battling rising inflation. The forint was 0.33% higher, trading at 361.35 per euro after the central bank raised its one-week deposit rate by 20 basis points to 3.1%, continuing a series of rate hikes. The currency has firmed nearly 3% since Nov. 23 when it fell to a record low of 372 versus the euro. "These clear steps should be enough to stabilize the forint and keep it away from the 370 level," an FX trader in Budapest said. "If the global fears about the Omicron variant subside, it could firm past 360." The forint was also lifted by Central Bank Governor Gyorgy Matolcsy's comments who said on Wednesday that rate hikes will continue in 2022 and that the bank will phase out its quantitative easing programme soon. Hungarian long-term government bond yields ticked 1-3 basis points higher after an about 20 basis-point rise in the previous session, reacting to the rate hike and tracking core yields, two fixed-income traders in Budapest said. The yield on the 10-year bond was about 4.65%. "This is such a high level that I expect a turnaround soon, especially with the forint firming," one FI trader said. Hungary also holds government bond auctions on Thursday. The Polish zloty extended its gains, firming to a three-week high by adding 0.32% and trading at 4.6030 versus the common currency, lifted by expectations of further rate hikes after November inflation jumped to a two-decade high of 7.7%. The Czech crown was 0.24% higher and trading at 25.400 to the euro. "Further hawkish decisions from (central) banks in the CEE region should support their currencies," PKO Bank wrote in a client note. Stock markets in the region were mixed, with Warsaw's equities weakening 0.55%. Prague was up 0.07%, while Budapest's index was 0.19% lower. Bucharest up 0.26%. CEE SNAPSHOT AT MARKETS 1025 CET CURRENCI ES Latest Previous Daily Change bid close hm 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 1364.10 1363.160 +0.07 +32.81 0 % % .BUX Budapes 51764.15 51860.19 -0.19% +22.93 t % .WIG20 Warsaw <.WIG20 2205.06 2217.18 -0.55% +11.14 > % .BETI Buchare 12226.77 12195.61 +0.26 +24.69 st % % .SBITO Ljublja <.SBITO 1220.42 1223.41 -0.24% +35.47 P na P> % .CRBEX Zagreb <.CRBEX 1989.77 1991.57 -0.09% +14.40 > % .BELEX Belgrad <.BELEX 809.19 810.76 -0.19% +8.09% 15 e 15> .SOFIX Sofia <.SOFIX 613.02 616.80 -0.61% +36.98 > % Yield Yield Spread Daily (bid) change vs change Bund in Czech spread Republi c CZ2YT= ps CZ5YT= ps CZ10YT ps Poland PL2YT= ps PL5YT= ps PL10YT ps FORWARD 3x6 6x9 9x12 3M interba nk Czech Hungary Poland Note: are for ask FRA prices quotes ******************************************** ****************** (Additional reporting by Alan Charlish in Warsaw; Editing by David Goodman and Shailesh Kuber)