CEE MARKETS-Bond yields steady near highs; eyes on Fed, Polish bond auction

WARSAW, Sept 16 (Reuters) - Central European bond yields stabilised on Wednesday after rising to multi-year highs, tracking moves in core markets, as investors braced for U.S. Federal Reserve's interest rate decision later in the day.

• Markets have largely priced in a quarter-point rate increase by the Fed, which would lift its target range to 3.75%-4%, while signalling further tightening ahead.

• The dollar held near multi-week highs ahead of the decision, but global bond yields eased after a recent run-up. Germany's 10-year bond yield fell 0.5 basis points to 3.53%, after reaching 3.5723% on Tuesday, its highest level since June 2009.

• Central European bond markets followed the global trend in recent days and stabilised on Wednesday, with the Czech 10-year yield at 5.3818% and the Polish at 6.4430%, both unchanged on the day.

• Poland's 10-year bond yields had hit a 3-1/2-year high of 6.5530% on Wednesday, before retreating.

• "The Czech bond market is not immune to the global sell-off. Market interest rates are rising across the domestic yield curve, most notably at the long end. Yesterday, the yield on the 10-year government bond approached 5.4%, the highest level since late 2022," Patria Finance Chief Economist Dominik Rusinko said in a note.

• "The decisive factor will be how long they remain at current levels."

• Investors will also watch a Polish government bond auction later on Wednesday, where the finance ministry plans to offer papers worth between 7 billion and 10 billion zlotys.

• "High demand, in the absence of a significant risk premium for the deteriorating global environment, could stabilize domestic government bonds on the secondary market," PKO BP analysts said.

• Central European currencies, meanwhile, were looking for direction as investors awaited the Fed's policy announcement and guidance on the future path of U.S. interest rates.

• The Polish zloty was unchanged at 4.3430 per euro at 0823 GMT and the Czech crown at 24.2960, while the Hungarian forint gained 0.1% to 364.80 per euro.