Czech crown holds ground, eyes regional markets

PRAGUE, Oct 10 (Reuters) - The Czech crown held its ground versus the euro in morning trade on Monday, as investors ignored uncertain domestic politics and watched other emerging markets for direction.

The crown traded at 28.175 per euro <0#EURCZK=> by 0725 GMT, retaining minor gains booked in the previous session.

Analysts saw limited room for the crown to firm without a clear bullish signal from regional currency markets, as players remained cautious before political talks on a new government and Friday's release of August current account numbers <ECONCZ>.

"The (euro) support levels at 28.100 per euro seem to be very firm, and breaking through them will require a strong stimulus," analysts at Prague bank CSOB said in a report.

"The markets are tired of monitoring domestic politics, which should not draw investor attention until after the Senate elections," they added.

President Vaclav Klaus, who is expected to pick a new prime minister only after the municipal and Senate elections at the end of this month, will start political talks on Thursday.

His aides have suggested the president would try to broker a deal between parties on a caretaker, interim cabinet that would lead the country to early polls to end political stalemate caused by an inconclusive general election in June.

----------------- MARKET SNAPSHOT AT 0725 GMT ----------------- Crown/euro <EURCZK=> last deals at 28.175 (+0.02 pct) Crown/dollar <CZK=> at 22.367 bid (-0.08 pct)

5-year yield due Oct 2010 <CZ5YT=RR> 3.61 pct bid (-7 bps) 10-year yield due Jan 2016 <CZ10YT=RR> 3.83 pct bid (+1 bps)

5-yr CZK/EUR mid yield spread <DE114147=> -7 bps (vs 1) 10-yr CZK/EUR mid yield spread <DE113529=> 7 bps (vs 6)

Current levels versus prior domestic close at 1500 GMT ---------------------------------------------------------------

((Reporting by Marek Petrus; prague.newsroom@reuters.com; Editing by Gerrard Raven; Reuters Messaging: marek.petrus.reuters.com@reuters.net; +420 224 190 477))

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Keywords: MARKETS CZECH CROWN MORNING