CEE MARKETS 2-FX ease as zloty leads drop, stocks weak

                                
 * FX lower as investors book profits
                                
 * Bonds quiet, Polish debt supply eyed
                                
 * IMF mission finishing in Hungary
                                
 
  (Adds details, bonds)
                                
 PRAGUE, May 18 (Reuters) - The Polish zloty led central
European currencies lower on Monday, with investors cautious
about riskier assets and weak stock markets weighing on the
region.
                                
 Currencies have fallen in the past week due to signs that
any global economic recovery will be slow, while a rally of over
30 percent in stock prices since March has cooled, taking away
some FX support.
                                
 The zloty <EURPLN=> fell 0.7 percent from Friday's domestic
close to bid at 4.474 to the euro, while Hungary's forint
<EURHUF=>, which posted its first weekly loss in a month last
week, fell 0.2 percent.
                                
 The Czech crown <EURCZK=> dipped 0.3 percent to 26.926 per
euro by 0927 GMT, and the Prague bourse <.PX> led regional
losses with a 1 percent fall on Monday.
                                
 "We ended last week on a cautious tone and the market is
starting in the same mood this week," said Societe Generale
strategist Murat Toprak.
                                
 On bond markets, Polish papers were quiet before details of
a Wednesday tender, and Czech bonds were a touch weaker.
                                
 The forint, crown and zloty have posted 7-10 percent gains
since lows in mid-February, and Toprak said investors were still
looking to lock in profits.
                                
 In Romania, the leu <EURRON=> edged up a touch but was off a
two-week low of 4.2 per euro from the previous session, after
data on Friday showed the Romanian economy shrank 6.4 percent on
the year in the first quarter of 2009, more than double
economists' forecasts.
                                
 
                                
 PROGRESS REPORTS
                                
 Hungarian, Czech and Slovak GDP also shrank much more than
expected in the first quarter as the global downturn hurt their
export-driven economies.
                                
 Strategists expect pressure to remain as the crisis hits
banks further and costs jobs, but they also say global news will
also drive risk sentiment.
                                
 "Developments in major markets and especially in the U.S.
should continue to give directions for CEE markets," Erste Bank
analysts said in a late Friday note.
                                
 The global financial crisis and subsequent economic downturn
hit central Europe last year, and Poland's zloty is still down a
quarter against the euro since July.
                                
 Hungary and Romania have both reached for International
Monetary Fund lifelines, and an IMF mission to Hungary is set to
conclude this week a progress review of fiscal reforms under the
terms of a $25.1 billion rescue loan.
                                
 A senior IMF adviser to the region, Anne-Marie Gulde-Wolf,
told Reuters at the weekend the fund was prepared to ease fiscal
conditions for borrowers, including Hungary. [ID:nLG342258]
                                
 The IMF and Hungary are expected to hold a news conference
on the latest quarterly review of Hungary's standby agreement
later on Monday. 
                                
 "There will not be much news out of it," the dealer said.
"They can say nice things but the truth remains ugly."
                                
 
----------------------MARKET SNAPSHOT-------------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2009 
Czech crown      <EURCZK=>   26.926   26.855   -0.26%    -0.64%
Polish zloty     <EURPLN=>    4.474    4.445   -0.65%    -8.02%
Hungarian forint <EURHUF=>  286.55   286.02    -0.18%    -8.03%
Croatian kuna    <EURHRK=>    7.379    7.377   -0.03%    -0.19%
Romanian leu     <EURRON=>    4.173    4.1805  +0.18%    -3.8%
Serbian dinar    <EURRSD=>   94.10    94.026   -0.08%    -4.91%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond   CZ2YT=RR   +2 basis points to  152bps over bmk*
4-yr T-bond   CZ4YT=RR   +8 basis points to  +204bps over bmk*
8-yr T-bond   CZ8YT=RR   +17 basis points to  +284bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond   PL2YT=RR   +2 basis points to  +447bps over bmk*
5-yr T-bond   PL5YT=RR   +3 basis points to  +350bps over bmk*
10-yr T-bond PL10YT=RR   +3 basis points to  +305bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond   HU3YT=RR   +8 basis points to  +921bps over bmk*
5-yr T-bond   HU5YT=RR    -1 basis points to  +840bps over bmk*
10-yr T-bond   HU10YT=RR  -2 basis points to  +716bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1129 CET.
Currency percent change calculated from the daily domestic 
close at 1600 GMT.
For related news and prices, click on the codes in brackets: All
emerging market news [EMRG]
Spot FX rates
Eastern Europe spot FX <EEFX=>    Middle East spot FX <MEFX=>
Asia spot FX <ASIAFX=>       Latin America spot FX <LATAMFX=>
Other news and reports  
World central bank news [CEN]  Economic Data Guide <ECONGUIDE> 
Official rates [GLOBAL/INT]  Emerging Diary [EMRG/DIARY] 
Top events [M/DIARY]  Diaries [DIARY] Diaries Index [IND/DIARY] 
 (Reporting by Reuters bureaus, writing by Jason Hovet; editing
by David Stamp)