CEE MARKETS 2-Zloty, forint in lead as FX jump on PMI data

                                
 * PMI, easing Dubai fears lift CEE, stocks
                                
 * Bond yields dip, with auctions, supply due
                                
 
  (Adds bonds, stocks)
                                
 PRAGUE, Dec 1 (Reuters) - Central European currencies
bounced off overnight lows on Tuesday, led by the Polish zloty
and Hungarian forint, as central Europe's manufacturing outlook
improved and appetite for emerging assets rose.
                                
 Investors' nerves steadied worldwide thanks to efforts by
Dubai World to restructure almost half its debt that analysts
said suggested the emirate's problems could be contained.
[ID:nSP5757]
                                
 Emerging markets took a hammering when concerns over Dubai
rose last week, although central Europe has been buoyed this
week by stronger economic data that points to recovery.
                                
 Poland's Purchasing Managers' Index (PMI) rose to 52.4
points in November, showing the first expansion in the sector in
19 months, while Czech PMI edged above the breakeven 50 points
for the first time since June 2008.[nGEE5AT1X7] [nGEE5AT1XJ]
                                
 That followed Polish third quarter growth numbers on Monday
that were well above expectations.
"The zloty gained in the morning thanks to PMI data and the
fact that euro/dollar is higher and I think this trend may be
continued later in the day," said an FX dealer at a Warsaw bank.
                                
 The euro is the region's main reference currency and markets
typically track the euro/dollar higher. 
                                
 The zloty <EURPLN=> rose 1 percent to bid at 4.123 to the
euro by 1042 GMT and the Czech crown <EURCZK=> gained 0.5
percent to a one-week high on the strong side of 26 to the euro.
                                
 Hungary's forint <EURHUF=> jumped 1 percent, unfazed after
its own PMI ticked lower in November, while Romania's leu
<EURRON=> edged up to an almost one-week high at 4.25.
                                
 Stocks in Warsaw <.WIG20> rose for a second straight
session, up around 1.5 percent to lead gains across the region.
                                
 Central European currencies have been hit by higher
volatility in the past two months, with investor worries over
debt problems in emerging countries like Dubai, Ukraine or
Latvia spreading jitters through emerging markets.
                                
 Strategists mostly see firming ahead for emerging European
assets, though volatility is expected to last in December,
especially given the region's own struggles to contain growing
budget deficits.
                                
 
                                
 LOOKING TO NEXT YEAR
                                
 Czech industrial output also fell in October at its slowest
pace in a year, data showed on Monday, adding to the positive
message from the purchasing managers' survey.
                                
 "For the first time since the crisis started we are above
the 50 point level, which is supporting optimism about the
future of the Czech economy," said Patria Finance chief
economist David Marek. 
                                
 Czech bond yields dipped mostly on Tuesday, getting support
also from central banker Vladimir Tomsik reiterating there was
still room to lower interest rates in the country -- though
markets have mostly priced this out. [ID:nGEE5B00CO]
                                
 The Czechs hold their final bond auction of the year on
Wednesday, while markets will watch for Thursday news on the
debt issuance plans for the first quarter.
Elsewhere, Hungarian bond yields slipped behind the stronger
forint, and Polish bonds were steady before a Wednesday tender.
                                
 
--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2009 
Czech crown      <EURCZK=>   25.987   26.118  +0.5%     +2.95%
Polish zloty     <EURPLN=>    4.123    4.166  +1.04%    -0.19%
Hungarian forint <EURHUF=>  272.08   274.97   +1.06%    -3.14%
Croatian kuna    <EURHRK=>    7.312    7.31   -0.03%    +0.72%
Romanian leu     <EURRON=>    4.25     4.266  +0.38%    -5.54%
Serbian dinar    <EURRSD=>   95.01    94.9    -0.12%    -5.82%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond   CZ3YT=RR   +6 basis points to  98bps over bmk*
7-yr T-bond   CZ7YT=RR    -4 basis points to  +107bps over bmk*
10-yr T-bond   CZ10YT=RR    0 basis points to  +96bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond   HU3YT=RR    -7 basis points to  +532bps over bmk*
5-yr T-bond   HU5YT=RR    -9 basis points to  +492bps over bmk*
10-yr T-bond   HU10YT=RR  -9 basis points to  +428bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1143 CET.
Currency percent change calculated from the daily domestic 
close at 1700 GMT.
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 (Reporting by Reuters bureaus, writing by Jason Hovet, editing
by Patrick Graham)
 ((prague.newsroom@thomsonreuters.com; Reuters Messaging:
jason.hovet.reuters.com@reuters.net; +420-224 190 476))