CEE MARKETS 2-FX, equities firm, seen extending gains

                                
 *Fx, equities firm, zloty eases slightly
                                
 *IMF to send mission to Romania in Jan.
                                
 
                                
 (Recasts with new prices, comments, background.)
                                
 WARSAW/BUDAPEST, Dec 28 (Reuters) - Most of emerging
Europe's currencies firmed slightly on Monday in thin trade
ahead of the year-end, and the region is expected to extend
gains next year.
                                
 Central European assets shrugged off news that Russia may
cut oil deliveries to the region to Slovakia, Hungary and the
Czech Republic [ID:nLDE5BR0RM]. The main stock market indices in
the region firmed 0.5-1.5 percent.
                                
 "Three or four deals all day...," one Budapest-based
currency dealer said. "We may see slightly more lively trade on
Dec. 30 and 31 when year-end positions will be closed."
                                
 The Czech crown<EURCZK=> and Hungary's forint <EURHUF=> were
bid 0.1 percent firmer versus the euro at 1441 GMT, from levels
before the Christmas holidays. Romania's leu<EURRON=> gained 0.2
percent, while Poland's zloty<EURPLN=> eased 0.2 percent.
                                
 The zloty has firmed by over 18 percent from its lows early
this year, the biggest currency gain in the region. It is likely
to remain the favourite of investors after markets become liquid
again next year, buoyed by Poland's stronger fundamentals than
elsewhere in the region, dealers said.
                                
 Dealers said Romania's leu could also firm further early
next year as a political crisis that has stalled International
Monetary Fund (IMF) aid approaches a resolution.
                                
 An IMF mission will return to Romania on Jan. 21 to resume
aid talks according to a report [ID:nLDE5BR09P] and the newly
appointed government is seen passing a cost-cutting 2010 budget
through parliament in January.
                                
 "After a few grim months, these should give the leu a
boost," said a trader in Bucharest.
                                
 Dealers said the Czech central bank surprise interest rate
cut earlier this month to a record low of one percent could
still weigh on the crown in the short term, but it could join a
likely firming trend in the region later.
                                
 "Although we do not believe there will be any massive
activity in local carry trades funded by the Czech crown, it may
lag behind the region in the beginning of the year," CSOB
analysts said in a note.
                                
 "It should tune back to the regional mood gradually though,
since no more rate cuts loom after the December one, according
to the minutes (of the meeting [ID:nLDE5BM155], and compared to
spring 2007 there are other more favorable funding currencies
for carry trades now, such as the dollar or yen," they added.
 --------------------------MARKET SNAPSHOT--------------------
 Currency                    Latest   Previous Local    Local
                                
                                   close    currency currency
                                
                                            change   change
                                
                                            today    in 2009 
 Czech crown      <EURCZK=>  26.396    26.421  +0.09%   +1.35%
 Polish zloty     <EURPLN=>   4.155     4.146  -0.22%   -0.96%
 Hungarian forint <EURHUF=> 272.92    273.14   +0.08%   -3.43%
 Croatian kuna    <EURHRK=>   7.302     7.311  +0.12%   +0.86%
 Romanian leu     <EURRON=>   4.2       4.208  +0.19%   -4.42%
 Serbian dinar    <EURRSD=>  96.05     95.843  -0.22%   -6.84%
                                
 Yield Spreads
 Czech treasury bonds <0#CZBMK=>
 3-yr T-bond   CZ3YT=RR   +5 basis points to  129bps over bmk*
 7-yr T-bond   CZ7YT=RR   +11 basis points to  +92bps over bmk*
 10-yr T-bond   CZ10YT=RR   +5 basis points to  +73bps over bmk*
 Polish treasury bonds <0#PLBMK=>
 2-yr T-bond   PL2YT=RR    -5 basis points to  +367bps over bmk*
 5-yr T-bond   PL5YT=RR    -4 basis points to  +330bps over bmk*
 10-yr T-bond PL10YT=RR    -2 basis points to  +289bps over bmk*
 Hungarian treasury bonds <0#HUBMK=>
 3-yr T-bond   HU3YT=RR    -4 basis points to  +549bps over bmk*
 5-yr T-bond   HU5YT=RR    -4 basis points to  +500bps over bmk*
 10-yr T-bond   HU10YT=RR  -1 basis points to  +427bps over bmk*
 *Benchmark is German bond equivalent.
 All data taken from Reuters at 1541 CET.
 Currency percent change calculated from the daily domestic 
close at 1600 GMT.

                                
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 (Reporting by Reuters bureaus, Writing by Dagmara
Leszkowicz/Sandor Peto; editing by Chris Pizzey/Ruth Pitchford)