CEE MARKETS-Romanian assets, hit by protests, lag post-Fed rebound

* CEE currencies, bonds firm as Fed does not turn hawkish
    * Romanian protests continue, weigh on asset prices
    * Czech central bank unlikely to change guidance on crown
cap

    By Sandor Peto and Jason Hovet
    BUDAPEST/PRAGUE, Feb 2 Central European assets
mostly firmed on Thursday on relief that the U.S. Federal
Reserve gave no hint of accelerating its rate hikes, but Romania
lagged behind the region following anti-government protests.
    Rising interest rates in the United States would make
emerging markets assets relatively less attractive.
    Hungary's forint led regional gains, firming 0.4
percent to 308.65 against the euro, to levels seen before dovish
central bank comments sent it into a slide last month.
    The leu steadied at 4.5405, slightly off 7-month
lows hit on Wednesday after massive street protests erupted in
Romania over the four-week-old leftist government's "emergency"
decree to ease anti-corruption rules.
    Hundreds of thousands rallied on Wednesday night again,
Romania's president condemned the decree, Western states
including Germany and the United Statses expressed concern over
the decision and on Thursday a cabinet minister resigned.
  
    Romanian markets have calmed somewhat after Wednesday's
plunge, but analysts said further jitters in politics and asset
prices were likely.
    "The street protests announced in Bucharest and in the main
cities could continue in the following days," Raiffeisen said in
a note on the region's markets.
    Romania's 3-year bond yield was bid at a 7-month high of
1.878 percent, up 13 basis points, and the uncertainty could
weigh on an auction of 2-year bonds scheduled for Thursday.
    Meanwhile, an auction of bonds is seen drawing ample demand
in Hungary, where yields dropped 2-3 basis points, a
Budapest-based dealer said.
    Czech bond yields dropped ahead of the central bank's
meeting.
    The meeting might revive speculation for a surge of the
Czech crown later this year, even though the bank is
not expected to change its guidance that a likely exit from a
cap on the crown's, would happen around mid-2017.
    The cap has kept the crown weaker than 27 against the euro
since 2013, but as inflation has risen to the bank's target,
investors have scrambled to buy crown assets this year,
speculating on a removal of the ceiling.
    Commerzbank analysts said in a note that commodity prices
and base effects still played a major role in Czech price data,
so the bank would not scrap the cap before mid-2017.
    Most analysts in a Reuters poll said the cap would be
removed in the second quarter. 
    "Whatever the (central bank) says, the (inflation) forecast
will be a key thing to watch," one trader said.
     
              CEE        SNAPS   AT  1010          
              MARKETS    HOT    CET           
                         CURRENCIES                
                         Lates  Previ  Daily  Chang
                         t      ous           e
                         bid    close  chang  in
                                       e      2017
 Czech crown             27.02  27.02   +0.0  -0.05
                            10     45     1%      %
 Hungary                 308.6  309.8   +0.4  0.06%
 forint                    500    800     0%  
 Polish                  4.309  4.312   +0.0  2.20%
 zloty                       0      8     9%  
 Romanian                4.540  4.541   +0.0  -0.12
 leu                         5      5     2%      %
 Croatian                7.456  7.465   +0.1  1.32%
 kuna                        5      3     2%  
 Serbian                 123.9  124.0   +0.1  -0.45
 dinar                     100    500     1%      %
 Note: daily  calculate  previ  close  1800        
 change       d from     ous    at     CET    
                         STOCK                     
                         S                    
                         Lates  Previ  Daily  Chang
                         t      ous           e
                                close  chang  in
                                       e      2017
 Prague                  940.9  938.2   +0.2   +2.1
                             9      3     9%     0%
 Budapest                32623  32584   +0.1   +1.9
                           .41    .18     2%     4%
 Warsaw                  2075.  2079.  -0.18   +6.5
                            41     10      %     4%
 Bucharest               7521.  7527.  -0.09   +6.1
                            22     94      %     6%
 Ljubljana               744.0  741.1   +0.4   +3.6
                             9      6     0%     9%
 Zagreb                  2150.  2151.  -0.05   +7.8
                            68     72      %     1%
 Belgrade     <.BELEX15  698.5  700.8  -0.33  -2.62
              >              8      8      %      %
 Sofia                   594.2  593.8   +0.0   +1.3
                             2      0     7%     3%
                         BONDS                     
                         Yield  Yield  Sprea  Daily
                                       d      
                         (bid)  chang  vs     chang
                                e      Bund   e in
 Czech                                        sprea
 Republic                                     d
   2-year     <CZ2YT=RR  -0.72  -0.08   +001  -6bps
              >              2      1    bps  
   5-year     <CZ5YT=RR  -0.12  -0.01   +028   +0bp
              >              9      8    bps      s
   10-year    <CZ10YT=R   0.47  -0.02   +001  -1bps
              R>                    2    bps  
 Poland                                            
   2-year     <PL2YT=RR  2.208  -0.01   +294   +1bp
              >                     1    bps      s
   5-year     <PL5YT=RR  3.141  -0.02   +355  -1bps
              >                     9    bps  
   10-year    <PL10YT=R  3.832  -0.04   +337  -3bps
              R>                         bps  
              FORWARD    RATE   AGREEMENT          
                         3x6    6x9    9x12   3M
                                              inter
                                              bank
 Czech Rep            <   0.25   0.23   0.24      0
              PRIBOR=>                        
 Hungary              <   0.33   0.42   0.52   0.25
              BUBOR=>                         
 Poland               <  1.765  1.805   1.89   1.73
              WIBOR=>                         
 Note: FRA    are for                              
 quotes       ask                             
              prices                          
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 (Additional reporting by Luiza Ilie in Bucharest; Editing by
Gareth Jones)