CEE MARKETS 2-FX extend losses, mkt eyes risk differentials

                                
 * FX lower, bonds broadly steady as market eyes Libya
                                
 * Polish data should prompt c.bank to halt rates next wk
                                
 * Zloty, forint may diverge on risk differentials
                                
 * Market welcomes Czech pension reform commitment
                                
 
                                
(Adds bonds, Polish data, updates markets)
                                
 By Marton Dunai
                                
 BUDAPEST, Feb 23 (Reuters) - Emerging European currencies
dipped again on Wednesday after losses in the previous session
caused by core market worries over Libya, which dealers said may
continue to weigh on the region's markets.
                                
 By 1103 GMT, Hungary's forint <EURHUF=> edged 0.2 percent
lower, the Polish zloty <EURPLN=> was off 0.1 percent, while the
Czech crown <EURCZK=> and the Romanian leu <EURRON=> were flat.
                                
 Poland published weaker-than-expected retail sales data and
a substantial growth in unemployment for January, which analysts
said should prompt the central bank to keep rates unchanged at
its meeting next week. [ID:nLDE71M0L8]
                                
 "The data supports expectations there will be no rate hike
in March, especially after the recent comments by Belka," BRE
Bank chief economist Ernest Pytlarczyk said.
                                
 Poland's central bank Governor Marek Belka has warned that
Poland's first rate hike after an 18-month pause was no sign of
an impending cascade of tightening. Two other rate setters
echoed that on Tuesday. [ID:nLDE71L2DC]
                                
 For a Reuters FX column on Polish monetary tightening click
on: [ID:nLDE71L0V2]
                                
 In Hungary, weak December retail sales showed soft domestic
demand during the Christmas season, but the data left the forint
unfazed as markets eye fiscal reforms and a reshuffle of the
central bank's rate-setting Monetary Council.
                                
 The fall in appetite for risk may have a differing impact on
different currencies, in particular the forint and the zloty,
analysts say.
                                
 "We think the market is overweight in Poland (in currency and
bonds), but underweight in Hungary (mostly in bonds). We
believe that in the current environment PLN/HUF could move
lower and Polish markets could underperform," UniCredit said in
a daily note to clients.
                                
 Warsaw's central bank, which broke an 18-month period of
record low interest rates to tighten in January, will not move
with haste now, policymakers said on Tuesday. 
                                
 Hungarian and Polish bonds were quiet.
                                
 
                                
 CZECHS BUCK PENSION TREND
                                
 Although dealers saw a bit of further easing for the crown,
analysts welcomed a Czech commitment to pension reform, which
parliament will approve by the autumn, a government official
said. The costs will likely be covered by a partial VAT hike.
[ID:nPRG004739] [ID:nPRG004740]
                                
 "The Czech coalition government is bucking the trend - a
move towards fully-funded pensions," Nomura analyst Peter Attard
Montalto wrote.
                                
 "The contrast with Hungary and Poland is stark. The
government remains on its rapid fiscal consolidation track
though more measures will be needed."
                                
 Hungary's government effectively renationalised mandatory
private pension funds earlier this year, while Poland plans to
reduce payments into the mandatory private pension pillar.
                                
 Prague will issue Eurobonds worth 1-2 billion euros in 2011,
Deputy Finance Minister Jan Gregor told Reuters. [ID:nPRG004742]
                                
 Czech bond yields were a touch higher before an auction of a
new three-year bond <CZ1002869=>, which was 2.5 times overbid
and sold at an average yield of 2.694 percent. [ID:nPRA005465]
--------------------------MARKET SNAPSHOT--------------------
 Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2011 
Czech crown      <EURCZK=>  24.521   24.511   -0.04%   +1.95%
Polish zloty     <EURPLN=>   3.962    3.959   -0.08%   -0.1%
Hungarian forint <EURHUF=>   272.8   272.23   -0.21%   +1.9%
Croatian kuna    <EURHRK=>   7.411    7.409   -0.03%   -0.42%
Romanian leu     <EURRON=>   4.225    4.224   -0.02%   +0.19%
Serbian dinar    <EURRSD=>  102.48   102.52   +0.04%   +3.36%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond   CZ2YT=RR   +5 basis points to  0bps over bmk*
7-yr T-bond   CZ7YT=RR   +3 basis points to  +89bps over bmk*
10-yr T-bond   CZ9YT=RR   +4 basis points to  +79bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond   PL2YT=RR    -4 basis points to  +360bps over bmk*
5-yr T-bond   PL5YT=RR    -4 basis points to  +345bps over bmk*
10-yr T-bond PL10YT=RR    -3 basis points to  +310bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond   HU3YT=RR    -4 basis points to  +520bps over bmk*
5-yr T-bond   HU5YT=RR    -6 basis points to  +483bps over bmk*
10-yr T-bond   HU10YT=RR  -3 basis points to  +433bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1203 CET.
Currency percent change calculated from the daily domestic 
close at 1700 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; Editing
by Patrick Graham)