CEE MARKETS 3-Forint gains, 15-yr Czech bonds boosted by tender

                                
 * Forint leads gains, moves beyond key 271.50 level
                                
 * Czech 15-yr bond yields fall after auction
                                
 
 (Updates throughout)
                                
 By Dagmara Leszkowicz and Marius Zaharia
                                
 WARSAW/BUCHAREST, Dec 2 (Reuters) - The Hungarian forint led
regional gains on Wednesday, as an improving outlook for central
Europe pushed it beyond technical resistance levels, while
15-year Czech bonds firmed after Prague's last tender this year.
                                
 Markets have been jolted in the past week by worries of
spreading debt woes from countries such as Dubai or Ukraine that
have highlighted central Europe's own struggles with mounting
government debt as the region pulls out of the economic crisis.
                                
 But some of those worries have eased, and manufacturing data
in the Czech Republic and Poland returned to positive territory
for the first time in more than a year this week.[ID:nGEE5B00OA]
                                
 At 1510 GMT, the Polish zloty <EURPLN=> traded virtually
flat, while the Czech crown <EURCZK=> gained 0.5 percent and the
forint <EURHUF=> added 0.6 percent.
                                
 "The Dubai concerns have eased and the forint has firmed
past a technical level at 271.50," a Budapest-based dealer said.
                                
 Hungary has cut its interest rates by a total of 300 basis
points since July to 6.5 percent. Investors expect another cut
of 50 basis points in December and see rates bottoming out at
5.5 percent next year.
                                
 On Wednesday, two Hungarian central bankers said they saw
room for further cuts but cautioned cutting rates too quickly
could lead to sharp forint falls if the global mood sours.
[ID:nGEE5B11CO].
                                
 In Romania, the leu <EURRON=> was stable ahead of a
presidential election runoff on Sunday, in which leftist leader
Mircea Geoana is expected to unseat incumbent President Traian
Basescu in one of the country's most important votes since the
fall of communism in 1989.
                                
 Markets expect Geoana to form a government relatively
quickly, thus ending a two-month long political deadlock, but
worry about its ability to pursue deep spending cuts to convince
the International Monetary Fund to resume cash disbursements.
                                
 
                                
 CZECH, POLISH TENDERS
                                
 The Czech Republic sold less than planned at its 15 year
bond auction on Wednesday, its last tender as it cuts supply
after heavier borrowing earlier this year. [ID:nPRA004872]
                                
 Markets were looking ahead to details due on Thursday about
next year's issuance plans, expected to stay elevated around the
record levels seen this year.
                                
 The yield on the 15-year bond fell more than 10 basis points
after the auction from 4.9 percent earlier in the day, but later
it rose back to around 4.86 percent.
                                
 Poland sold a total of 5.7 billion zlotys in well-bid
tenders of two- and five-year bonds [ID:nWAR011204], but failed
to move debt markets.
                                
 "It seemed the primary tender could improve the sentiment as
the auction was successful, but the truth is we have another
auction in a week and the market considers this," said Pawel
Bialczynski, dealer at BRE bank in Warsaw.
                                
 Hungarian bonds gained slightly in line with the forint and
markets eyed a bond tender on Thursday <HUISSUE>.
--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2009 
Czech crown      <EURCZK=>  25.808  25.93   +0.47%   +3.66%
Polish zloty     <EURPLN=>   4.11    4.114  +0.1%    +0.12%
Hungarian forint <EURHUF=> 270.32  271.8    +0.55%   -2.5%
Croatian kuna    <EURHRK=>   7.31    7.307  -0.04%   +0.75%
Romanian leu     <EURRON=>   4.235   4.242  +0.17%   -5.21%
Serbian dinar    <EURRSD=>  95.41   95.23   -0.19%   -6.22%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond   CZ3YT=RR   +2 basis points to  116bps over bmk*
7-yr T-bond   CZ7YT=RR    -5 basis points to  +101bps over bmk*
10-yr T-bond   CZ10YT=RR    -11 basis points to  +87bps over
bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond   PL2YT=RR   +4 basis points to  +367bps over bmk*
5-yr T-bond   PL5YT=RR   +1 basis points to  +343bps over bmk*
10-yr T-bond PL10YT=RR    0 basis points to  +299bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond   HU3YT=RR    -2 basis points to  +532bps over bmk*
5-yr T-bond   HU5YT=RR    -4 basis points to  +487bps over bmk*
10-yr T-bond   HU10YT=RR  0 basis points to  +428bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1709 CET.
Currency percent change calculated from the daily domestic 
close at 1600 GMT.
                                
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 (Reporting by Reuters bureaux; writing by Dagmara Leszkowicz
and Marius Zaharia; editing by Philippa Fletcher)
 ((dagmara.leszkowicz@thomsonreuters.com, RM:
dagmara.leszkowicz.reuters.com@reuters.net, tel +48 22 653
9718))