CEE MARKETS 3-Czechs, Romania leave rates flat, FX unfazed

                                
 * Czechs, Romania leave rates flat, FX unmoved
                                
 * Other FX, bonds fall after recent gains, equities mixed
                                
 * Markets may be overpricing rate increases in region
                                
 
                                
 (Updates with Czech, Romania's decisions on rates)
                                
 By Sandor Peto and Dagmara Leszkowicz
                                
 BUDAPEST/WARSAW, Feb 3 (Reuters) - The Czech crown and
Romania's leu shrugged off decisions by their countries' central
banks to leave interest rates unchanged as they were both in
line with market expectations.
                                
 The Czech central bank kept rates flat as a strong currency
and fiscal austerity offset inflation risks from the economic
recovery, while Romania's bank held fire in order to support the
struggling economy. [ID:nLDE7110QJ] [ID:nLDE712157]
                                
 A Reuters poll on Wednesday suggested forward rate curves in
the European Union's eastern emerging economies are overpricing
future rate increases. [ID:nLDE712084] 
                                
 By 1237 GMT the crown <EURCZK=> was 0.2 percent stronger
against the common currency after showing no reaction to the
decision. Romania's leu <EURRON=> was 0.1 percent lower.
                                
 The Polish zloty <ERUPLN=> also weakened by some 0.1 percent
and Hungary's forint <EURHUF=> shed some 0.2 percent.
                                
 Assets in the region have in general firmed in recent weeks
as concerns over the euro zone debt crisis have eased, and
government bonds joined Thursday's profit-taking.
                                
 Hungarian yields rose 6-9 basis points from three-month lows
and Polish yields were up 1-2 basis points.
                                
 Hungary sold 12-month Treasury bills at an average yield of
5.96 percent at auction, below levels seen at a sale of the same
paper two weeks ago. [ID:nBUD005709]
                                
 "The market no longer expects the central bank (NBH) to lift
interest rates further (from 6 percent)," one Budapest-based
fixed income trader said.
                                
 The NBH has raised rates in three steps of 25 basis points
each since November to fight inflation, and changes in its
rate-setting council by March are seen turning it more dovish.
                                
 
                                
 CENTRAL BANK COMMENTS AWAITED
                                
 Strong currencies and stuttering recovery should limit the
scope for rate hikes in the region, analysts say.
[ID:nLDE71207T]
                                
 Czech markets will watch whether the central bank's rhetoric
turns more hawkish at a news conference following the rate
decision at 1330 GMT. Analysts expect the bank's new
macroeconomic forecasts to show higher growth for this year.
                                
 Markets will also watch the tone of the Romanian central
bank's comments at around 1400 GMT.
                                
 "We do believe that supporting the economic recovery would
require acting now, not later, but this could be very costly in
terms of inflation," ING Bank said in a note ahead of the rate
decision.
                                
 Poland's central bank is widely expected to raise interest
rates further after a 25 basis point increase last month, and
the zloty is expected to outperform regional peers in the next
12 months. [ID:nLDE7102GY]
--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2011 
Czech crown      <EURCZK=>  24.051   24.092   +0.17%   +3.95%
Polish zloty     <EURPLN=>   3.912    3.908   -0.1%    +1.18%
Hungarian forint <EURHUF=> 269.4    268.99    -0.15%   +3.18%
Croatian kuna    <EURHRK=>   7.418    7.42    +0.03%   -0.51%
Romanian leu     <EURRON=>   4.26     4.256   -0.09%   -0.63%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond   CZ2YT=RR   +3 basis points to  35bps over bmk*
7-yr T-bond   CZ7YT=RR   +1 basis points to  +61bps over bmk*
10-yr T-bond   CZ9YT=RR   +1 basis points to  +76bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond   PL2YT=RR   +5 basis points to  +353bps over bmk*
5-yr T-bond   PL5YT=RR   +4 basis points to  +332bps over bmk*
10-yr T-bond PL10YT=RR   +1 basis points to  +296bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond   HU3YT=RR   +9 basis points to  +492bps over bmk*
5-yr T-bond   HU5YT=RR   +11 basis points to  +450bps over bmk*
10-yr T-bond   HU10YT=RR +8 basis points to  +395bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1347 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 bureaux, writing by Marton Dunai and
Sandor Peto; Editing by Ron Askew)