CEE MARKETS-Stocks retreat, FX drifts sideways with ECB eyed
PRAGUE, July 16 (Reuters) - Central European stocks mostly gave up gains from the previous session on Thursday while currencies eased a touch, with markets caught between global worries over U.S.-China trade and awaiting cues from an ECB meeting.
Warsaw stocks .WIG20 fell half a percent and Budapest .BUX was down 0.3%, although a rise in Czech utility CEZ CEZP.PR helped buoy Prague .PX.
Currencies for the most part traded sideways after gaining some momentum this week.
The Polish zloty EURPLN= eased 0.3% and the Czech crown EURCZK= was down a touch at 26.678 to the euro at 0836 GMT after matching its July high of 25.575 on Wednesday.
Hungary's forint EURHUF= was flat at 353.91.
"The Hungarian currency has been stuck in a more and more narrow range," Equilor said. "Bigger moves could start in the FX market in the afternoon as the European Central Bank has its rate meeting later today."
Central European rate setters have eased policy to counter the harsh economic impact of the COVID-19 pandemic but are mostly seen taking a pause, especially with inflation remaining elevated.
The ECB, after extraordinary moves, is also all but certain to keep policy on hold on Thursday.
Risk appetite took a hit due to worries about a wide-ranging dispute between the United States and China over the control of advanced technologies and the protection of civil liberties in Hong Kong. A growing number of coronavirus cases in parts of the world was also giving investors pause.
On bond markets, the Czechs were offering Treasury bills following the sale of a rare euro-denominated bond on Wednesday that drew bids of over 1 billion euros for the offer of 300 million.
Hungary and Romania will also hold sales.
"While Hungary issues its plain-vanilla benchmark bonds, likely attracting healthy demand anew, Romania comes with a 2025 (state bond)," Raiffeisen said. "The latter was well bid at previous auctions and we expect this to repeat today."
AT 1036 CET
Note: daily change
Note: FRA quotes are for ask prices
(Reporting by Jason Hovet in Prague, Anita Komuves in Budapest; Editing by Shailesh Kuber)
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