CEE MARKETS 2-Currencies hold onto gains, Romania euro plan eyed

                                
 * Bonds trade sideways
                                
 * Turnover thin as London markets closed
                                
 * Equity markets mostly lower, Prague bucks trend
                                
 
                                
(Adds new comment, prices)
                                
 BUDAPEST, April 29 (Reuters) - Eastern Europe's currencies
held onto recent gains on Friday supported by a strong euro, and
were expected to stay in narrow ranges in trading subdued by the
closure of the London markets.
                                
 The Polish zloty <EURPLN=> firmed a shade to 3.934 against
the euro by 0947 GMT, while the Hungarian forint <EURHUF=> and
the Romanian leu <EURRON=> were up 0.15 percent at 263.60 and
4.072, respectively. 
                                
 "The lack of investors from London, where the market is
closed due to the royal wedding, will favour a quiet session,"
Bank BPH analysts wrote in a note.
                                
 "Hence, we expect the EUR/PLN to remain in the 3.93-3.96
range and activity to be subdued."
                                
 A dealer in Budapest said he expected the forint to trade
between 263.50 and 265 to the euro. 
                                
 Hungarian and Polish government bonds were a shade firmer
from Thursday but turnover was very low.
                                
 
                                
 CARRY TRADE ATTRACTIVE
                                
 The Hungarian currency -- and the wider region -- is still
being supported by dollar weakness and continued capital flows
to the region's higher-yielding assets.
                                
 Investors are attracted by Hungary's high interest rates --
at 6 percent <NBHI> -- and continued optimism over the
government's fiscal plans, which they hope will keep the budget
deficit below 3 percent of GDP in coming years after an expected
surplus this year due to big one-off revenues.
                                
 The forint stayed close to 15-month highs and the leu near
13-month highs reached earlier this month.
                                
 An International Monetary Fund team started a review of
Romania's new two-year aid deal on Wednesday that will continue
through May 9. It is widely expected to note Romania's progress
in meeting fiscal deficit targets. [ID:nLDE73L02W]
                                
 The government will meet later on Friday to approve the
country's updated convergence programme, its report to the EU on
progress towards adopting the euro and fulfilling the economic
criteria needed to do so.
                                
 Government sources have said Romania plans to drop its goal
of switching to the single currency in 2015 and is only seeking
to enter the pre-euro Exchange Rate Mechanism (ERM-2), in
2013-2014. [ID:nLDE73P0C5]
                                
 The Czech crown <EURCZK=>, a funding currency of the region,
was down 0.2 percent at 24.142.
                                
 The region's stock markets traded mostly lower, with
Budapest <.BUX> down 0.4 percent and Warsaw <.WIG20> down 0.5
percent, while Prague's main stock index <.PX> bucked the trend,
firming 0.2 percent.
 --------------------------MARKET SNAPSHOT--------------------
 Currency                    Latest   Previous Local    Local
                                
                                   close    currency currency
                                
                                            change   change
                                
                                            today    in 2011 
 Czech crown      <EURCZK=>  24.142    24.086  -0.23%   +3.55%
 Polish zloty     <EURPLN=>   3.934     3.936  +0.05%   +0.61%
 Hungarian forint <EURHUF=> 263.6     263.99   +0.15%   +5.46%
 Croatian kuna    <EURHRK=>   7.36      7.359  -0.01%   +0.27%
 Romanian leu     <EURRON=>   4.072     4.078  +0.15%   +3.95%
 Serbian dinar    <EURRSD=>  98.95     99.31   +0.36%   +7.05%
                                
 Yield Spreads
 Czech treasury bonds <0#CZBMK=>
 2-yr T-bond   CZ2YT=RR    -7 basis points to  -22bps over bmk*
 7-yr T-bond   CZ7YT=RR    -5 basis points to  +38bps over bmk*
 10-yr T-bond   CZ9YT=RR   +1 basis points to  +67bps over bmk*
 Polish treasury bonds <0#PLBMK=>
 2-yr T-bond   PL2YT=RR    -5 basis points to  +315bps over bmk*
 5-yr T-bond   PL5YT=RR    -3 basis points to  +309bps over bmk*
 10-yr T-bond PL10YT=RR    -2 basis points to  +285bps over bmk*
 Hungarian treasury bonds <0#HUBMK=>
 3-yr T-bond   HU3YT=RR    -5 basis points to  +438bps over bmk*
 5-yr T-bond   HU5YT=RR    -5 basis points to  +415bps over bmk*
 10-yr T-bond   HU10YT=RR  -2 basis points to  +373bps over bmk*
 *Benchmark is German bond equivalent.
 All data taken from Reuters at 1147 CET.
 Currency percent change calculated from the daily domestic 
close at 1600 GMT.
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  (Reporting by Reuters bureaus; Writing by Krisztina
Than/Sandor Peto; editing by Patrick Graham, John Stonestreet)