CEE MARKETS 2-FX edge up; Czech crown lags behind on data

                                
 * FX mixed, but find equity support
                                
 * Czech industrial data worsens
                                
 * CEE politics still eyed
                                
 
  (Adds details, fixed income)
                                
 By Jason Hovet
                                
 PRAGUE, April 14 (Reuters) - Central European currencies
held steady on Tuesday, buoyed by equity gains after markets
reopened following the Easter holiday, though the Czech crown
trailed after worse-than-expected industrial data.
                                
 Sentiment to emerging market assets has jumped in the past
month, lifted by a rebound in global equities that hit bottom,
although analysts and dealers remain cautious on emerging
Europe's recovery as data still points to a rough slowdown.
                                
 Czech industrial output sank for the fifth straight month in
February, and retail sales fell more than forecast indicating
rising unemployment was hitting domestic demand. [ID:nLE99108]
                                
 The crown <EURCZK=> lost 0.2 percent from Friday's domestic
close to bid at 26.49 to the euro by 0942 GMT, but has gained 4
percent so far this month and remains the region's only gaining
currency in 2009. 
                                
 Lutz Karpowitz, a senior FX strategist with Commerzbank in
Frankfurt, said the data was negative for the currency, but that
the region also tracked gains in global equity markets that were
boosted by strong earnings from Goldman Sachs. [ID:nLE45160]
"(Czech) industrial output was much worse than expected,"
Karpowitz said. "But on the other hand, it is nothing we haven't
seen in other countries."
                                
 The Polish zloty <EURPLN=>, the top performer in the region
this month with a 8 percent gain, was flat at 4.368. 
                                
 Analysts said news of two Polish opposition politicians
quitting the PiS party last week was bullish for the country's
2012 euro target hopes as it removed some of the party's support
for requiring constitutional changes before euro adoption.
                                
 In Hungary, the forint <EURHUF=> was up 0.5 percent at
289.35 per euro in thin trade. Government bond yields widened
slightly, with eyes on parliament where lawmakers are expected
to endorse economy minister Gordon Bajnai to replace outgoing
Prime Minister Ferenc Gyurcsany.
                                
 New Czech Prime Minister Jan Fischer, who takes the helm
officially next month, is also to begin picking his caretaker
cabinet to replace the outgoing administration that was toppled
in a no-confidence vote in March.
                                
 In Romania, where markets were open on Monday, the leu
<EURRON=> was down 0.1 percent from Friday but still near
four-month highs hit after seeking external aid last month.
                                
 
                                
 SHORT-TERM
                                
 Central Europe's export-driven economies have suffered in
the global slowdown, but analysts expect some stabilisation as
government measures such as car scrapping subsidies give a boost
to the region's important automotive sector.
                                
 However, they also warn any rebound for economies is still
far off, and pressure on currencies could return.
                                
 "Markets have found some traction... so in the short-term it
still looks quite good," said a central European currency dealer
based in Stockholm. "But the Czech data was still not great
(today) and we still see some bad data coming up."
                                
 Inflation in central Europe has eased although price
pressures ahead and currency weakness pose policy challenges for
the region's central banks. A Polish central banker said on
Tuesday that his country's rate cycle may be near an end after
cuts brought the main rate to an all-time low. [ID:nWAR008163]
                                
 
----------------------MARKET SNAPSHOT-------------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2009 
Czech crown      <EURCZK=>   26.49    26.448  -0.16%    +0.99%
Polish zloty     <EURPLN=>    4.368    4.372  +0.09%    -5.79%
Hungarian forint <EURHUF=>  289.35   290.83   +0.51%    -8.92%
Croatian kuna    <EURHRK=>    7.382    7.394  +0.16%    -0.23%
Romanian leu     <EURRON=>    4.132    4.127  -0.12%    -2.85%
Serbian dinar    <EURRSD=>   93.96    94.04   +0.09%    -4.77%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond   CZ2YT=RR    +5 basis points to  188bps over bmk*
4-yr T-bond   CZ4YT=RR   +20 basis points to  +248bps over bmk*
8-yr T-bond   CZ8YT=RR   -12 basis points to  +292bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond   HU3YT=RR   +17 basis points to  +892bps over bmk*
5-yr T-bond   HU5YT=RR   +14 basis points to  +817bps over bmk*
10-yr T-bond   HU10YT=RR +18 basis points to  +700bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1143 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 Jason Neely and Andy Bruce)