CEE MARKETS 2-FX stronger on rising euro, worries persist

                                
 * FX stronger as worries over Ireland soften
                                
 * Polish data may give fresh clues on monetary policy
                                
 * Hungary's bonds flat ahead of tender
                                
 
                                
 (Adds detail, background)
                                
 WARSAW, Nov 18 (Reuters) - Emerging European currencies
mostly rose on Thursday, lifted by a weaker dollar, but gains
are likely to be limited as worries over the heavily indebted
euro zone periphery linger.
                                
 The Polish zloty led gains in the region ahead of the
release of wage and employment data later that may give further
clues on the likely scope for monetary tightening in Poland.
                                
 "If the data remains below expectations the view that the
central bank is unlikely to take any rate steps is likely to be
confirmed, which is however only going to put limited pressure
on the zloty," analysts at Commerzbank wrote in a note.
                                
 The market has rowed back from its previous view that the
10-strong MPC would start raising borrowing costs already this
month after comments from policymakers suggested there may not
be a majority to back such a rate increase.
                                
 By 0957 GMT the Polish zloty <EURPLN=> rose 0.5 percent to
bid at 3.938 to the euro, while Hungary's forint <EURHUF=> added
0.4 percent. Romania's leu <EURRON=> gained around 0.1 percent
to the euro and the Czech crown <EURCZK=> was flat.
                                
 Stocks across the region were also in the black, rising
0.2-1.3 percent.
                                
 Hungary's bonds were flat ahead of a government bond tender
at 1030 GMT, where the debt agency AKK offers 45 billion forints
worth of debt for sale <HUISSUE>.
                                
 Polish 10-year bonds continued a weakening trend that
started on Wednesday after the country's finance ministry placed
3 billion zlotys in long-dated papers. But dealers say there is
a strong appetite for short-dated papers as expectations for
quick interest rate increases have eased.
                                
 "If the market does not expect rate hikes, the overliquidity
in the banking sector may flow into short-dated papers," said
Krzysztof Izdebski, a dealer at PKO BP.
                                
 The 3x6 forward rate agreement (FRA), which projects where
three-month rates will be in three months' time, has fallen some
8 basis points in the past days and is now pricing in a rise of
32 basis points.
                                
 
                                
 IRISH WOES
                                
 On the regional front, dealers said worries over Ireland's
debt troubles had eased somewhat after it agreed to work with a
European Union-IMF mission on urgent steps to shore up its
shattered banking sector. [ID:nLDE6AG004] 
                                
 Irish Central Bank Governor Patrick Honohan said on Thursday
the country was likely to end up taking a loan from the European
Union and International Monetary Fund which will run into tens
of billions of euros. [ID:nWLA8423]
                                
 "The (Irish) storm has abated for now," said one
Warsaw-based dealer.
                                
 "The euro and global stocks rebounded slightly and this
transferred into a stronger region, but we should remember that
there may be other troubled countries in the pipeline."
                                
 The Irish debt woes have hurt central European assets in
past days, though to a lesser extent than during the Greek
crisis in the spring when spillover risk was clearer due to
Greek banking exposure in the region.
--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2010 
Czech crown      <EURCZK=>   24.614   24.615   0%       +6.92%
Polish zloty     <EURPLN=>    3.938    3.958  +0.51%    +4.22%
Hungarian forint <EURHUF=>  274.89   276.02   +0.41%    -1.65%
Croatian kuna    <EURHRK=>    7.393    7.393   0%       -1.13%
Romanian leu     <EURRON=>    4.292    4.295  +0.07%    -1.27%
Serbian dinar    <EURRSD=>  106.7    106.76   +0.06%   -10.14%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond   CZ2YT=RR    -1 basis points to  72bps over bmk*
7-yr T-bond   CZ7YT=RR   +1 basis points to  +69bps over bmk*
10-yr T-bond   CZ9YT=RR    -3 basis points to  +91bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond   PL2YT=RR    -2 basis points to  +363bps over bmk*
5-yr T-bond   PL5YT=RR    -5 basis points to  +350bps over bmk*
10-yr T-bond PL10YT=RR    -3 basis points to  +314bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond   HU3YT=RR    -2 basis points to  +580bps over bmk*
5-yr T-bond   HU5YT=RR    -4 basis points to  +543bps over bmk*
10-yr T-bond   HU10YT=RR  -4 basis points to  +467bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1057 CET.
Currency percent change calculated from the daily domestic 
close at 1700 GMT.
                                
 
                                
 
                                
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 (Reporting by Reuters bureaus, Writing by Dagmara Leszkowicz;
editing by Patrick Graham and Giles Elgood)