CEE MARKETS 2-FX mixed as crown, forint shrug off data

                                
 * Crown, forint take poor data in stride
                                
 * Polish bonds stabilise after budget blow-out 
                                
 
  (Adds bonds, details)
                                
 By Jason Hovet
                                
 PRAGUE, Sept 8 (Reuters) - The Hungarian forint and Czech
crown mostly shrugged off data on Tuesday that showed how slow
economic recovery would be in these countries, trading in ranges
as markets turned cautious after previous gains.
                                
 Hungary's economy contracted 7.5 percent year-on-year in the
second quarter, better than earlier estimates, although July's
industrial output was worse than expected, shedding an annual
19.4 percent after a modest June slowdown. [ID:nL8168897]
                                
 In the Czech Republic, the economy fell a more-than-expected
5.5 percent year-on-year in the same period, although it grew
0.1 percent from the previous quarter to inch out of recession.
[ID:nL8380265]
                                
 The Hungarian forint <EURHUF=> crept up 0.1 percent to
271.72 per euro by 0904 GMT, and the Czech crown <EURCZK=> was
little changed to bid at 25.475 to the euro after modest gains
on Monday.
                                
 "The mood lately has been better than the numbers," a
Stockholm-based central European currency dealer said. "We had
some good runs yesterday -- with the G20 statements on running
stimuli the main driver -- but investors seem to be turning
cautious ahead of the U.S. open."
                                
 Stock markets in central Europe, after rises of around 2
percent on Monday following a meeting of G20 leaders over the
weekend, extended gains, with all rising around 0.6 percent.
                                
 Markets, though, were wary ahead of the U.S. open after a
long holiday weekend, dealers said.
                                
 
                                
 FORWARD IMPLICATIONS
                                
 Poland's zloty <EURPLN=> edged up 0.2 percent to regain some
losses after markets absorbed weekend news the government's 2010
budget gap would likely double, which had pushed bond yields up
7 basis points. [ID:nL7528821]
                                
 Yields stabilised on Tuesday with the 10-year benchmark
yielding 6.17 percent, around 100 basis points above the 2-year.
Markets were looking to Wednesday's 5-year bond tender, where
analysts said the government may have to accept lower prices.
                                
 "Yields have not changed. The real exam for the market will
be the 5-year bond tender," said one-Warsaw based dealer.
                                
 Investors have turned more bearish on Polish bonds,
influenced by expectations of higher bond issuance and bets the
central bank has finished monetary easing. Since August rates
along the forward rate (FRA) curve have jumped 20-50 basis
points.
                                
 Central Europe's governments have seen budgets deteriorate
with rising unemployment and lower revenue as the region's
export-reliant economies are punished by sinking demand for
their cars and electronics in the global downturn.
                                
 In Romania, which like Hungary has secured external aid
packages to get through the economic crisis, adjusted industrial
output was flat on the month in July and showed a 6.9 percent
fall year-on-year in July, an improvement on the previous
month's data.
 The leu currency <EURRON=> was up 0.1 percent from Monday's
local close.
                                
 "This is good news. Industry was first to suffer from the
financial crisis and it is now first to recover," Ionut Dumitru
of Raiffeisen Bank in Bucharest said. "In the next few months we
will continue to see improvement because Western economies are
recovering."
--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2009 
Czech crown      <EURCZK=>   25.475   25.473  -0.01%   +5.02%
Polish zloty     <EURPLN=>    4.094    4.1    +0.15%   +0.51%
Hungarian forint <EURHUF=>  271.72   271.87   +0.06%   -3.01%
Croatian kuna    <EURHRK=>    7.327    7.328  +0.01%   +0.52%
Romanian leu     <EURRON=>    4.236    4.241  +0.12%   -5.23%
Serbian dinar    <EURRSD=>   93.047   93.11   +0.07%   -3.83%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond   CZ3YT=RR    -5 basis points to  197bps over bmk*
7-yr T-bond   CZ7YT=RR    -4 basis points to  +183bps over bmk*
10-yr T-bond  CZ10YT=RR    -3 basis points to  +184bps over bmk*
 
Polish treasury bonds <0#PLBMK=>
2-yr T-bond   PL2YT=RR    -3 basis points to  +405bps over bmk*
5-yr T-bond   PL5YT=RR   +1 basis points to  +373bps over bmk*
10-yr T-bond PL10YT=RR   +1 basis points to  +387bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1106 CET.
Currency percent change calculated from the daily domestic 
close at 1600 GMT.
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 (Reporting by Reuters bureaus, writing by Jason Hovet, editing
by Stephen Nisbet)