CEE MARKETS 2-Leu up after Romanian vote, other FX down

                                
 * Leu reverses losses after official election results
                                
 * Other FX weaker, profit-taking trims gains
                                
 
                                
 (Adds fixed income, detail)
                                
 By Dagmara Leszkowicz
                                
 WARSAW, Dec 7 (Reuters) - Romania's leu clawed back early
losses on Monday after final results in the second round of a
presidential election confirmed centre-right incumbent Traian
Basescu unexpectedly clinging to power by a slim margin.
                                
 Most exit polls had shown leftist challenger Mircea Geoana
narrowly ahead. Markets are worried Basescu will struggle to
form a government needed to unblock crucial International
Monetary Fund aid.
                                
 Last month, the IMF suspended a review of the aid deal
propping up the EU's second poorest economy, after opposition
parties toppled a Basescu-allied cabinet. [ID:nGEE5B6008]
                                
 "Any government is better than a non-functioning
government," said Ulrich Leuchtmann, FX analyst at Commerzbank.
"And it would be best if the government is formed as quickly as
possible to end this political deadlock."
                                
 At 1011 GMT, the leu <EURRON=> was 0.2 percent stronger
against the euro, trimming previous losses.
                                
 Other currencies were slightly down, with Hungary's forint
<EURHUF=> leading losses, falling 0.4 percent. 

                                
 FURTHER GAINS
                                
 The Polish zloty, down at 4.065 to the euro, was still close
to 11-month highs after Friday's sharp rise on unexpectedly
strong U.S. data.
                                
 Polish bonds were stable ahead of road bonds supply due at
1100 GMT. Hungarian paper was unchanged from the previous close.
                                
 "The Polish zloty was undervalued for the last few months
despite its good fundamentals and at a time when the impulse
came from abroad (in the form of more positive U.S. data last
Friday) it had no choice but to strengthen," Leuchtmann said.
                                
 "Today I think there's some small profit-taking on the
currency but the zloty should even dip below 4.0 against the
euro next week."
                                
 Elsewhere, the Czech crown <EURCZK=> was also slightly down,
tracking its regional peers after the statistics office showed
the country's trade surplus at almost twice previous forecasts.
                                
 Komercni Banka analysts said the crown had space to gain if
markets stay on a more positive footing after improving economic
data in recent weeks, with technical analysis showing the next
resistance around 25.35 per euro.
If the positive mood on global markets, supported by
favorable macroeconomic data, holds, riskier assets including
the crown could profit in the coming days, KB said.
                                
 Strategists have been most bullish on the Polish currency
versus peers, with a Reuters poll last Friday showing the unit
will lead gains in the region next year. [ID:nGEE5B229H]
*************************************************************
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2009 
Czech crown      <EURCZK=>  25.717   25.656   -0.24%   +4.03%
Polish zloty     <EURPLN=>   4.065    4.061   -0.1%    +1.23%
Hungarian forint <EURHUF=> 269.4    268.44    -0.36%   -2.17%
Croatian kuna    <EURHRK=>   7.285    7.305   +0.27%   +1.1%
Romanian leu     <EURRON=>   4.213    4.222   +0.21%   -4.71%
Serbian dinar    <EURRSD=>  96.23    96.94    +0.74%   -7.01%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond   CZ3YT=RR   +7 basis points to  94bps over bmk*
7-yr T-bond   CZ7YT=RR    -2 basis points to  +103bps over bmk*
10-yr T-bond   CZ10YT=RR    -8 basis points to  +82bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond   PL2YT=RR    -3 basis points to  +370bps over bmk*
5-yr T-bond   PL5YT=RR    0 basis points to  +329bps 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    0 basis points to  +512bps over bmk*
5-yr T-bond   HU5YT=RR    0 basis points to  +475bps over bmk*
10-yr T-bond   HU10YT=RR +3 basis points to  +423bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1011 CET.
Currency percent change calculated from the daily domestic 
close at 1600 GMT.
                                
 
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 (Reporting by Reuters bureaus; Writing by Dagmara Leszkowicz;
Editing by Mike Peacock and Victoria Main)