By Anita Komuves and Krisztina Than BUDAPEST, October 29 (Reuters) – The Hungarian forint extended its gains and the Polish zloty also strengthened on Friday, with flash data showing annual inflation accelerated to 6.8% in October, higher than analysts’ estimates, reinforcing expectations of a rate hike. In an unexpected move, the Polish central bank raised its key rate in October by 40 basis points to 0.5%, acting earlier than analysts expected in an attempt to curb a spike in inflation. Polish inflation reached 5.9% already in September, well above the central bank’s target range of 2.5% plus or minus a percentage point. Investors are now eyeing the bank’s Nov. 3 meeting to see if the tightening continues and at what pace, after some central bankers called for more hikes. “We expect the NBP to deliver a measured 25bp rise, with not insignificant risks for the central bank to remain on hold and a lower likelihood of a larger 50bp hike,” the Morgan Stanley analysts in a note. Central banks in the EEC region have already raised interest rates across the board to cope with rising inflation amid a rapid recovery from the pandemic-induced crisis, with soaring wages and a tightening labor markets. “Despite signs of slowing GDP growth in 3Q21, due to supply chain bottlenecks in the automotive sector, above target inflation continues to accelerate and has risen further. accelerated in September, “Morgan Stanley said, adding that he expected the Czech central bank to raise rates by 75bp on November 4. New GDP data showed on Friday that the Czech economy grew more slowly than expected in the third quarter, showing a faltering recovery as a global supply crisis hit the auto sector. “We believe the CNB will discuss a 75 or 100bp hike in its key rate and the decision will likely be near,” Citigroup said in a note. The Polish zloty was 0.2% firmer to trade at 4.6151 against the common currency, while the forint gained 0.4% and traded at around 360 per euro, after lows lately, in what traders have called a correction after the falls. Hungary’s central bank will hold its next rate meeting on November 16, and the bank announced another rate hike after five consecutive rate hikes since June. Stock markets in the region were mixed, with Budapest up 0.2% while Bucharest added 0.1%. Warsaw shares were broadly stable. SNAPSHOT OF EEC MARKETS T 1003 CET CURRENC IES Last daily change previous change in bid closing in 2021 EURCZK = Czech EURHUF = Hungary 0 EURPLN = Polish EURRON = Romania EURHRK = Croatia EURRSD = Serbian 0 Note: calculated from of 1800 daily change CET Last previous daily change close change in 2021 .PX Prague 1337.53 1338.640 -0.08% +30.22 0% .BUX Budapes 53861.6 53766.44 +0.18% +27, 91 t 2% .WIG20 Warsaw 2,394.62 2,392.67 + 0.08% + 20.70% .BETI Bucare 12,808.4 12,795.26 + 0.10% +30.62 st 3% .SBITOP Ljublja <.sbitop na> % .CRBEX Zagreb 2056.41 2058.26 -0.09% +18.23% .BELEX1 Belgrad <.belex1 e> .SOFIX Sofia 578.97 577.36 + 0.28% + 29.37% Yield Yield Spread Daily variation (bid) vs Bund variation of Czech spread Republished CZ2YT = R s CZ5YT = R s CZ10YT = s Poland PL2YT = R s PL5YT = R s PL10YT = s FORWARD 3x 6×9 9×12 3M Czech interbank 3.49 3.62 3.62 2.18 Hungary Rep 2.81 3.14 3.41 2.03 Poland 1.81 2.25 2, 64 0.72 ******************************************* *** **** ********** (Reporting by Anita Komuves) (Editing by Sherry Jacob-Phillips)