CEE MARKETS-Stocks weaken, most currencies ease as risk-on rally halts

By Anita Komuves BUDAPEST, Jan 22 (Reuters) - Central European stocks weakened and most currencies eased on Friday as the risk-on sentiment of the week fuelled by U.S. stimulus hopes faded, stopping the weakening of the dollar and recent gains in equities. Stocks in the CEE region fell, tracking the decline of their European peers as data showed euro zone business activity shrank in January amid renewed coronavirus lockdowns. Sentiment in Europe was also more cautious after the European Central Bank's message on Thursday was perceived as more hawkish than expected. Prague's equities were down 1.17%, extending losses after their biggest one-day drop in a month on Thursday. Financial stocks fell the most. Budapest's index led losses, falling 1.31%. Warsaw lost 0.55%. Bucharest was down 0.41%. After three straight days of losses, the dollar stabilized on Friday and riskier currencies lost out. "The EURUSD turned south this morning which marginally weakens CEE currencies," Erste Bank wrote in a note. CEE currencies eased, except for the Hungarian forint, which added to its gains from the previous sessions and edged up 0.08% to trade at 356.70 per euro. The currency managed to gain this week and break out of the 359-362 range where it has been stuck recently. "The weakening of the dollar initiated the strengthening of the forint," a Budapest-based FX trader said. "The market has been positive towards the forint recently, due to relatively high interest rates, good covid numbers and positive messages from the central bank." According to a Reuters poll of analysts, Hungary's central bank is expected to leave key interest rates on hold next Tuesday after a recent warning by a deputy governor that cautious policy was still justified amid the pandemic. Elsewhere, the Czech crown was down 0.1% and was trading at 26.106 per euro. The Romanian leu and the Polish zloty were flat. Poland will sell bonds worth 6 billion to 8 billion zlotys at an auction on Friday. In its monthly plan, the finance ministry had said it would offer bonds worth 5 billion to 9 billion zlotys. CEE SNAPSHO AT MARKETS T 1110 CET CURRENC IES Latest Previou Daily Change s bid close change in 2021 EURCZK= Czech <EURCZK= 26.1060 26.0800 -0.10% +0.47% crown > EURHUF= Hungary <EURHUF= 356.700 357.000 +0.08% +1.69% forint > 0 0 EURPLN= Polish <EURPLN= 4.5350 4.5340 -0.02% +0.53% zloty > EURRON= Romanian <EURRON= 4.8755 4.8748 -0.01% -0.22% leu > EURHRK= Croatian <EURHRK= 7.5608 7.5645 +0.05% -0.18% kuna > EURRSD= Serbian <EURRSD= 117.470 117.570 +0.09% +0.09% dinar > 0 0 Note: calculated from 1800 daily CET change Latest Previou Daily Change s close change in 2021 .PX Prague 1046.65 1059.04 -1.17% +1.90% 00 .BUX Budapest 43672.5 44250.4 -1.31% +3.72% 5 3 .WIG20 Warsaw 1942.66 1953.49 -0.55% -2.08% .BETI Buchares 10270.7 10313.3 -0.41% +4.74% t 4 8 .SBITOP Ljubljan <.SBITOP 931.23 933.23 -0.21% +3.37% a > .CRBEX Zagreb 1798.38 1808.19 -0.54% +3.40% .BELEX1 Belgrade <.BELEX1 732.65 736.37 -0.51% -2.13% 5 5> .SOFIX Sofia 499.23 499.85 -0.12% +11.55 % Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT=R 2-year <CZ2YT=R 0.2200 -0.0300 +092bp -2bps R R> s CZ5YT=R 5-year <CZ5YT=R 0.7640 -0.0280 +147bp -2bps R R> s CZ10YT= <CZ10YT= 1.2450 -0.0220 +175bp -2bps RR 10-year RR> s Poland PL2YT=R 2-year <PL2YT=R 0.0350 -0.0710 +074bp -6bps R R> s PL5YT=R 5-year <PL5YT=R 0.4070 -0.0490 +111bp -4bps R R> s PL10YT= <PL10YT= 1.2340 -0.0040 +174bp +0bps RR 10-year RR> s FORWARD 3x6 6x9 9x12 3M interba nk Czech 0.39 0.45 0.56 0.36 Rep <PRIBOR= > Hungary 0.75 0.76 0.78 0.75 Poland 0.18 0.19 0.20 0.21 Note: are for ask FRA prices quotes ********************************************* ***************** (Additional reporting by Alan Charlish in Warsaw and Jason Hovet in Prague)