The Hungarian forint eased on Wednesday, underperforming its regional peers, as it was unable to benefit from the rate hike delivered by the central bank on Tuesday due to expectations of a bigger increase from some markets participants. The forint weakened 0.39% and was trading at 368.30 versus the euro, about 1% off its all-time low of 372 it hit at the end of November. "It looks like a series of small rate hikes is not as effective as bigger steps such as in Poland and the Czech Republic," an FX trader in Budapest said. "But this is enough to keep the forint from significant, sudden weakening." The central bank raised its base rate by 30 basis points to 2.4% on Tuesday and raised the rate on its overnight deposit facility by a larger-than-expected 80 basis points to 2.4%, aligning it with the base rate in a surprise move. read more The bank also raised its inflation forecasts, raising its 2022 CPI forecast to 4.7%-5.1%. If the upwards revision of inflation forecasts is "not accompanied by accelerated monetary tightening, then it becomes negative for the exchange rate rather than supportive. What explains why the tightening cycle should be long, and not front-loaded?" Commerzbank wrote in a note. Long-term government bond yields were stable on Wednesday after a jump of 15-20 basis points in the previous session following the central bank"s announcement it was ending its bond buying programme, a fixed-income trader in Budapest said. read more The yield on the 10-year bond was about 4.55%, while the 20-year yield was 4.7%. Elsewhere in the region, currencies were little moved or edged higher as investors were waiting for key meetings of the U.S. Federal Reserve and the European Central Bank while liquidity was low as the end of the year was approaching. The Polish zloty edged up 0.01% to 4.6230 per euro. November inflation was 7.8% in Poland, a touch higher than the flash estimate, data showed on Wednesday. The Czech crown firmed 0.12% to trade at 25.2840 versus the common currency as markets were expecting bigger rate hikes following hawkish comments from the central bank. The Czech 2-year interest rate swap has risen by 43 bps since Friday"s open to trade at a 13-year high around 4%. Stock markets in the region were mixed, with Warsaw (.WIG20) down 1.17% and Budapest (.BUX) easing 0.14%. Prague (.PX) gained 0.21% while Bucharest (.BETI) slid 0.16%. CEE MARKETS SNAPSHOT AT 1026 CET CURRENCIES Latest Previous Daily Change bid close hm in 2021 EURCZK= Czech crown 25.2840 25.3150 +0.12% +3.74% EURHUF= Hungary forint 368.3000 366.8500 -0.39% -1.52% EURPLN= Polish zloty 4.6230 4.6235 +0.01% -1.38% EURRON= Romanian leu 4.9494 4.9495 +0.00% -1.71% EURHRK= Croatian kuna 7.5200 7.5215 +0.02% +0.37% EURRSD= Serbian dinar 117.4800 117.5800 +0.09% +0.08% Note: daily change calculated from 1800 CET Latest Previous Daily Change close change in 2021 .PX Prague (.PX) 1404.51 1401.5700 +0.21% +36.74% .BUX Budapest (.BUX) 50082.22 50153.00 -0.14% +18.94% .WIG20 Warsaw (.WIG20) 2185.99 2211.81 -1.17% +10.18% .BETI Bucharest (.BETI) 12297.64 12316.84 -0.16% +25.41% .SBITOP Ljubljana (.SBITOP) 1231.55 1238.11 -0.53% +36.71% .CRBEX Zagreb (.CRBEX) 2015.96 2021.15 -0.26% +15.91% .BELEX15 Belgrade (.BELEX15) 829.07 829.55 -0.06% +10.75% .SOFIX Sofia (.SOFIX) 602.49 607.97 -0.90% +34.63% Yield Yield Spread Daily (bid) change vs Bund change in Czech Republic spread CZ2YT=RR 2-year 3.2950 0.3200 +398bps +32bps CZ5YT=RR 5-year 2.9700 0.0770 +357bps +8bps CZ10YT=RR 10-year 2.7090 0.1260 +308bps +13bps Poland PL2YT=RR 2-year 2.8420 0.0110 +353bps +1bps PL5YT=RR 5-year 3.3590 0.0090 +396bps +2bps PL10YT=RR 10-year 3.2660 0.0690 +363bps +8bps FORWARD 3x6 6x9 9x12 3M interbank Czech Rep 4.42 4.13 3.99 3.28 Hungary 5.00 5.12 5.10 3.69 Poland 3.21 3.43 3.34 2.32 Note: FRA quotes are for ask prices ************************************************************** Additional reporting by Robert Muller and Jason Hovet in Prague and Alan Charlish in Warsaw; Editing by Krishna Chandra Eluri Our Standards: The Thomson Reuters Trust Principles.