CEE MARKETS 2-Leu down after govt tax hike, other FX mixed

                                
 * Leu, Romanian stocks down on political worries
                                
 * Crown little changed after new Czech PM appointed
                                
 
                                
 (Adds fixed income, detail)
                                
 WARSAW, June 28 (Reuters) - Romania's leu fell on Monday
after the government's plans to hike value added tax failed to
allay concerns over the country's ability to meet conditions of
its IMF-led aid package.
                                
 Romania will raise value added tax by 5 percentage points to
24 percent, replacing harsh spending cuts rejected by the
country's Constitutional Court last week. [ID:nLDE65P07E]
                                
 Emerging European markets are continuing to keep a nervous
eye on the uncertainty in Romania where the government only
narrowly survived a no-confidence vote earlier this month over
austerity measures, analysts said. [ID:nLDE65P0CC]
                                
 "Government support is fragile. Markets will not calm down
until the IMF clearly announces what it plans to do," Nicolaie
Alexandru-Chidesciuc, chief economist at ING bank in Bucharest
wrote in a note.
                                
 The IMF's country representative was quoted on Monday as
saying the fund's board might delay talks on Romania's 20
billion euros aid package until early July. [ID:nLDE65R0EM]
                                
 By 0928 GMT the leu <EURRON=> was down 0.6 percent, while
Bucharest's BET index <.BETI> fell some 0.5 percent, recovering
some of its previous sharper losses.
                                
 Other currencies were mixed, but mostly moved around their
previous closing levels and dealers said that due to a lack of
domestic macroeconomic data, the situation in Romania and global
sentiment were likely to set the trend in coming sessions.
                                
 
                                
 NEW CZECH PM HAS MARKET APPROVAL
                                
 Poland's zloty <EURPLN=> was a touch down, while the Czech
crown <EURCZK=> was 0.1 percent stronger against the euro,
though dealers said Czech President Vaclav Klaus's appointment
of Petr Necas as prime minister had little impact on the crown.
                                
 "Talks continue and if agreement is reached, the Czech
Republic will end up with the strongest government in years,"
4Cast said.
                                
 The Civic Democrats have been holding coalition talks with
two smaller centre-right parties, TOP09 and Public Affairs,
after the three won a total of 118 seats of 200 in last month's
election on pledges of austerity and fighting corruption.
[ID:nLDE65R0AX]
                                
 Investors, analysts and rating agencies have cheered the
victory of the austerity-minded parties as the best possible
election outcome, and most-likely grouping to conduct pension
and health reform -- areas in which the country has lagged
neighbours.
                                
 Elsewhere, Hungary's forint was slightly stronger against
the euro <EURHUF=>, but dealers said the unit still has room to
weaken against the Swiss franc <CHFHUF=> on moves on the
euro/franc.
                                
 The forint fell to a 15-month low of 211.57 <CHFHUF=> versus
the franc last Friday, fuelling concerns over the sizeable
amount of Swiss franc loans held by Hungarian households.
                                
 Hungary's bond yields fell some 5-15 basis points across the
curve, while Polish bonds were almost unchanged, with dealers
saying the market had already entered holiday mode and that
liquidity was low.
--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2010 
Czech crown      <EURCZK=>  25.706   25.722   +0.06%   +2.38%
Polish zloty     <EURPLN=>   4.113    4.111   -0.05%   -0.22%
Hungarian forint <EURHUF=> 283.15   283.71     +0.2%   -4.52%
Croatian kuna    <EURHRK=>   7.194    7.194       0%   +1.6%
Romanian leu     <EURRON=>   4.301    4.275   -0.6%    -1.48%
Serbian dinar    <EURRSD=> 104      103.83    -0.16%   -7.81%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond   CZ2YT=RR    -11 basis points to  142bps over bmk*
7-yr T-bond   CZ7YT=RR   +2 basis points to  +162bps over bmk*
10-yr T-bond   CZ9YT=RR    -6 basis points to  +150bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond   PL2YT=RR    -2 basis points to  +428bps over bmk*
5-yr T-bond   PL5YT=RR    -5 basis points to  +395bps over bmk*
10-yr T-bond PL10YT=RR    -1 basis points to  +335bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond   HU3YT=RR    -5 basis points to  +634bps over bmk*
5-yr T-bond   HU5YT=RR    -17 basis points to  +574bps over bmk*
10-yr T-bond   HU10YT=RR  -5 basis points to  +503bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1128 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 Sonya Hepinstall/Toby Chopra)