CEE MARKETS 2-FX down but crown up as coalition talks on track

                                
 * Crown touch up, investors await news about coalition
                                
 * Polish privatisation seen supporting zloty
                                
 
                                
 (Adds fixed income, detail)
                                
 WARSAW, June 2 (Reuters) - The Czech crown was a touch up
against the euro as Czech right-wing parties prepared to meet
for talks on forming a coalition after their surprise win in
elections at the weekend.
                                
 Other currencies were a touch down amid persistent worries
over the the euro zone fiscal woes, pushing the euro -- the
region's main reference currency -- lower against the dollar.
                                
 Three Czech parties (the ODS, TOP09 and Public Affairs)
planned to meet on Wednesday for the first round of trilateral
talks on forming a government with most analysts saying a quick
formation of a coalition would be positive for financial
markets. 
                                
 Building a coalition would require tough negotiations
though, analysts said.
                                
 "Investors are waiting on negotiations of the coalition.
Nothing is sure yet, so there has been a correction (from the
gains after) the big election win," a Prague dealer said.
                                
 "We can get close to 25 (per euro) but I don't think we will
stay there long ... They can say they'll do reforms, but they
still have to do it and it takes time."
                                
 
                                
 For a Take a Look on the Czech Parliamentary Elections,
click on: [ID:nLDE6301ED]
                                
 
                                
 The crown <ERUCZK=> was up 0.1 percent against the euro at
25.712 by 0856 GMT. The Hungarian forint <EURHUF=>, Romanian leu
<EURRON=> and Polish zloty <EURPLN=> were each 0.2 percent
weaker against the common currency.
                                
 Bonds were also mixed across the region, with Polish paper
slightly up ahead of a 2-year bonds tender due at 1000 GMT.
                                
 Poland's ambitious privatisation plans, which aim to raise
some 25 billion zlotys this year, are accelerating with the sale
of the country's No. 2 utility Tauron due around June 30, which
will be Poland's second biggest IPO this year after top insurer
PZU's <PZU.WA> $2.7 billion flotation last month.
                                
 "Good news for the zloty really -- apart from the weak close
of the US stock markets," analysts at Commerzbank wrote in a
note.
                                
 Earlier on Wednesday, sources told Reuters that Poland set a
maximum price for Tauron's initial public offering at 0.7 zlotys
per share, valuing the flotation at some 5.2 billion zlotys
($1.54 billion). [ID:nLDE6510AQ]
                                
 Poland's privatisation plans are seen boosting the Polish
currency, as they should draw foreign investors who would
convert large amounts of foreign currency into zloty.
                                
 The country will choose a new president on June 20 after the
death of conservative incumbent Lech Kaczynski in a plane crash
in Russia in April. 
                                
 The outcome will help determine the pace of reforms needed
to improve the European Union's largest ex-communist economy and
prepare it for euro entry. 
--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2010 
Czech crown      <EURCZK=>  25,712   25,74    +0,11%   +2,36%
Polish zloty     <EURPLN=>   4,103    4,097   -0,15%   +0,02%
Hungarian forint <EURHUF=> 276,29   275,65    -0,23%   -2,15%
Croatian kuna    <EURHRK=>   7,255    7,256   +0,01%   +0,75%
Romanian leu     <EURRON=>   4,184    4,174   -0,24%   +1,28%
Serbian dinar    <EURRSD=> 102,41   102,46    +0,05%   -6,38%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond   CZ2YT=RR    -3 basis points to  129bps over bmk*
7-yr T-bond   CZ7YT=RR    -8 basis points to  +153bps over bmk*
10-yr T-bond   CZ9YT=RR   +4 basis points to  +143bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond   PL2YT=RR    -2 basis points to  +416bps over bmk*
5-yr T-bond   PL5YT=RR   +1 basis points to  +376bps over bmk*
10-yr T-bond PL10YT=RR   +2 basis points to  +316bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond   HU3YT=RR   +10 basis points to  +566bps over bmk*
5-yr T-bond   HU5YT=RR   +11 basis points to  +531bps over bmk*
10-yr T-bond   HU10YT=RR +12 basis points to  +471bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1056 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;
Editing by Susan Fenton)