CEE MARKETS 2-FX firm from recent lows, c.banks eyed

                                
  (Adds details, fixed income)
                                
 PRAGUE, Feb 5 (Reuters) - Central European currencies firmed
from recent lows on Thursday, with the Czech crown holding
steady before an expected half percentage point interest rate
cut later in the day.
                                
 Hungary's forint <EURHUF=> rose 0.4 percent to 295.35 to the
euro, well off a record low of 304 hit on Wednesday, while the
Polish zloty was up 0.2 percent to bid at 4.64 per euro by 0935
GMT, but still near 4-1/2 year lows.
Currencies have been hit hard so far in 2009 by darkening
economic outlooks and falling interest rates in the region, and
on Thursday Czech data showed a worse than expected trade
deficit in December, which analysts said will weigh on the
crown. [ID:nL5137664]
                                
 "The (Czech trade) number ... confirms the (poor) situation
for exporters, which has already been shown in the drop in
foreign orders," said David Navratil, an economist with Ceska
Sporitelna bank.
                                
 The crown <EURCZK=> was flat at 28.273 versus the euro,
shrugging off another double digit drop in exports. In Romania,
the leu <EURRON=> was up 0.1 percent at 4.298 per euro.
                                
 Steep manufacturing drops are signalling a rough landing for
the region's export-heavy economies, which has spooked investors
who have accelerated an outflow of funds.
                                
 Romania cut borrowing costs for the first time in 19 months
on Wednesday. The Czechs are expected to cut rates to match
their historic low of 1.75 percent on Thursday but a weaker
currency may limit moves. [ID:nLS36071]
                                
 "We look for a 50 bps cut, maybe only 25 bp should the
currency weakness raise some hesitancy among the voters," said
Dalimil Vyskovsky, a bond trader with Komercni Banka. 
                                
 "The currency is supposedly much weaker than their latest
model outcomes, though it plays less a role at this time as
exporters keep complaining that their hedging was already done
at much lower levels."
                                
 Investors will also watch the European Central Bank on
Thursday, which is expected to keep rates on hold this month.
                                
 "For the time being the market is really quiet, but later in
the day, there is the BoE rate decision, the ECB rate meeting
and U.S. data, which may well define the course for the region's
currencies," a Budapest trader said.
                                
 On bond markets, Czech yields ticked up, while Polish bonds
were steady.
                                
 Hungary will offer 40 billion forints ($172.5 million) worth
of 12-month Treasury bills at an auction on Thursday. <HUISSUE>
                                
 Hungary's Government Debt Agency (AKK) is also expected to
decide whether to issue a new government bond series in
February. The AKK suspended regular bond tenders in October when
the local market froze up due to a lack of demand.
                                
 
----------------------MARKET SNAPSHOT-------------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2009 
Czech crown      <EURCZK=>   28.273   28.265  -0.03%    -5.38%
Polish zloty     <EURPLN=>    4.64     4.651  +0.24%    -11.31%
Hungarian forint <EURHUF=>  295.35   296.5    +0.39%    -10.77%
Croatian kuna    <EURHRK=>    7.4     7.405   +0.07%    -0.47%
Romanian leu     <EURRON=>    4.298   4.302   +0.09%    -6.6%
Serbian dinar    <EURRSD=>   92.591  92.737   +0.16%    -3.36%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond   CZ2YT=RR   +4 basis points to  115bps over bmk*
4-yr T-bond   CZ4YT=RR   +5 basis points to  +120bps over bmk*
8-yr T-bond   CZ8YT=RR   +5 basis points to  +117bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond   PL2YT=RR   +5 basis points to  +364bps over bmk*
5-yr T-bond   PL5YT=RR    -1 basis points to  +290bps over bmk*
10-yr T-bond PL10YT=RR    -6 basis points to  +238bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond   HU3YT=RR   +25 basis points to  +941bps over bmk*
5-yr T-bond   HU5YT=RR   +16 basis points to  +888bps over bmk*
10-yr T-bond   HU10YT=RR +18 basis points to  +676bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1037 CET.
Currency percent change calculated from the daily domestic 
close at 1600 GMT.
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 (Reporting by Reuters bureaus, writing by Jason Hovet, editing
by Andy Bruce)