CEE MARKETS 3-Forint down as rate rises near end, CZK rises

                                
 * Forint returns to session lows after cbank presser
                                
 * Rate tightening outlook not clear, analysts see end
                                
 * Crown tests 24.200 per euro level, fresh Nov 2008 highs
                                
 
                                
 (Updates with Hungary cbank)
                                
 WARSAW/PRAGUE, Jan 24 (Reuters) - The forint slipped half a
percent and bond yields dipped on Monday after the Hungarian
central bank raised interest rates for the third month in a row,
but left questions as to whether tightening was at a peak.
                                
 The rise by a quarter percentage point to 6.0 percent had
been expected by a majority of analysts, and markets had priced
in a rate rise within the next three months.<HUFFRA>
                                
 The forint got an initial boost from the rate rise before
falling back to session lows seen before the decision, when some
investors had scaled back bets for tighter policy.
                                
 The central bank said after the decision that it would weigh
inflation risks in coming months to decide whether to raise
interest rates further. Some analysts said the bank's tightening
cycle may be at or near the end. [ID:nLDE70N1G8] [ID:nLDE70N1J3]
                                
 The forint <EURHUF=> was bid down 0.4 percent on the day at
274.77 to the euro by 1524 GMT.
                                
 Government bond yields dipped 2-3 basis points.
                                
 "Investors probably believe this is the top of the rate hike
cycle and this is where the new composition council will cut
rates from," a Budapest trader said.
                                
 Many analysts have seen the bank's tightening in the context
of a policy battle with the Fidesz government whose unorthodox
fiscal measures have contributed to higher inflation pressures
and higher risk premia on Hungarian assets since last year.
                                
 The mandates of four rate-setters on the seven-member
Monetary Council expire on March 1, which could tilt the board
in the government's favour.
                                
 "It is hard not to conclude that February will be the 'last
chance' for a rate hike and even among the present (bank)
members there does not seem to be a strong majority (if any) in
favour of one," Danske Bank said in a note.
                                
 
                                
 RATE OUTLOOKS
                                
 The Hungarians had become the first in central Europe to
raise interest rates after two years of recession-forced
loosening. The Poles followed the Hungarians with an interest
rate rise last week. 
                                
 The Polish zloty <EURPLN=> dipped 0.2 percent on Monday,
bidding at 3.88 per euro, while the Romanian leu <EURRON=> was
steady. 
                                
 Th view that the Czechs will not tighten policy until the
middle of 2011 has done little to dent appetite for the crown.
                                
 The Czech crown <EURCZK=> continued a rally built on
improving economic data this year and tested fresh highs from
November 2008. It rose 0.4 percent to 24.227 to the euro.
                                
 "We are in for a second test of support below 24.200, there
was a gap between 24.200 and 24.100 last week, so we will see
what it looks like now," CSOB dealer David Sykora said.
                                
 "If 24.200 is breached, then it is open all the way to
23.700, but there are not so many people who would like to see
it below 24.000." 
                                
 The crown has gained 2 percent -- the same amount as the
forint -- since Nov. 29, when the Hungarians first raised rates.
The zloty has led gains in that time with a 4 percent rise.
                                
 
--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2011 
Czech crown      <EURCZK=>   24.234   24.315  +0.33%   +3.16%
Polish zloty     <EURPLN=>    3.88     3.873  -0.18%   +2.01%
Hungarian forint <EURHUF=>  274.77   273.68   -0.4%    +1.17%
Croatian kuna    <EURHRK=>    7.399    7.37   -0.39%   -0.26%
Romanian leu     <EURRON=>    4.266    4.268  +0.05%   -0.77%
Serbian dinar    <EURRSD=>  104.51   104.77   +0.25%   +1.36%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond   CZ2YT=RR   +2 basis points to  52bps over bmk*
7-yr T-bond   CZ7YT=RR   +1 basis points to  +76bps over bmk*
10-yr T-bond   CZ9YT=RR   +1 basis points to  +85bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond   HU3YT=RR   +3 basis points to  +549bps over bmk*
5-yr T-bond   HU5YT=RR   +2 basis points to  +512bps over bmk*
10-yr T-bond   HU10YT=RR +2 basis points to  +444bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1632 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 Dagmara Leszkowicz
and Jason Hovet; Editing by Toby Chopra)