CEE MARKETS 2-Currencies mixed, forint and zloty recover

                                
 (Updates with forint, zloty rebound, adds fixed income)
                                
 By Marius Zaharia
                                
 BUCHAREST, Feb 2 (Reuters) - Most central European
currencies weakened early on Monday, in line with falling shares
in Europe, while the Hungarian forint moved away from record
lows as investors booked profits at key resistance levels.
                                
 The forint <EURHUF=>, the most battered currency last week,
traded 0.2 percent firmer from Friday's close, and compared with
an all-time low of 299.30. The Polish zloty <EURPLN=> was 0.5
percent stronger versus the euro, off a key level of 4.46.
                                
 "The zloty and the forint had a brief rebound as some
investors decided to book profits as record lows hit last week
are seen providing some resistance near-term," a London-based
dealer said. "The overall mood is still the same as last week."
                                
 Hungarian Prime Minister Ferenc Gyurcsany said on Sunday he
was "very concerned" about the forint trading near levels of
around 300 to the euro, as the forint's weakness could hurt
foreign currency borrowers [ID:nL1496502].
                                
 Analysts have also said levels weaker than 300 may hit many
households which took out loans in Swiss francs, euros and the
Japanese yen in past years, as their monthly repayments will
rise at a time of serious economic woes and job losses.
                                
 The Romanian leu <EURRON=> and the Czech crown <EURCZK=>
fell 0.1 percent each.
                                
 "We remain on the edge of 28.00," a Prague dealer said.
"Once we close beyond 28.00 we can go further up.
                                
 Central European currencies were under ongoing weakening
pressure as recession moves towards the vulnerable region and
central banks have repeatedly cut interest rates in response.
                                
 "The pressure on currency is still high, as the global
stocks posted huge falls," said a dealer at Warsaw-based bank.
                                
 A key Polish central banker said interest rates could be
lowered to 3 percent this year from the current 4.25 percent
[ID:nL2414050].
                                
 Romania --which has so far stayed off the regional trend of
monetary easing-- and the Czech Republic are expected to cut
their interest rates this week. Czech finance minister Miroslav
Kalousek said a contraction of the economy could not be ruled
out [ID:nL2471192].
                                
 Fixed income markets were relatively quiet on Monday, with
investors in Hungary eyeing FX moves.
                                
 "In shorter papers, at levels around 10.30/50 we can already
see some foreigners buying in, if there was some improvement in
FX, the forint were to firm past 295, that could trigger a 20
bps correction in bonds as well."
----------------------MARKET SNAPSHOT-------------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2009 
Czech crown      <EURCZK=>  28.04   28       -0.14%    -4.59%
Polish zloty     <EURPLN=>   4.43    4.454   +0.54%    -7.11%
Hungarian forint <EURHUF=> 297.9   298.35    +0.15%   -11.53%
Croatian kuna    <EURHRK=>   7.38    7.364   -0.22%    -0.2%
Romanian leu     <EURRON=>   4.294   4.29    -0.09%    -6.51%
Serbian dinar    <EURRSD=>  94.4    94.318   -0.09%    -5.21%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond   CZ2YT=RR   +14 basis points to  103bps over bmk*
4-yr T-bond   CZ4YT=RR   +9 basis points to  +97bps over bmk*
8-yr T-bond   CZ8YT=RR   +13 basis points to  +122bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond   PL2YT=RR   +8 basis points to  +338bps over bmk*
5-yr T-bond   PL5YT=RR   +6 basis points to  +274bps over bmk*
10-yr T-bond PL10YT=RR   +2 basis points to  +247bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond   HU3YT=RR   +28 basis points to  +846bps over bmk*
5-yr T-bond   HU5YT=RR   +28 basis points to  +791bps over bmk*
10-yr T-bond   HU10YT=RR +24 basis points to  +624bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1214 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 Marius Zaharia,
editing by Stephen Nisbet)