CEE MARKETS 2-Currencies flat, euro debt still in focus

                                
 * Strong Polish, Czech PMIs underpin hopes for recovery
                                
 * Leu, forint ease after end-2010 firming
                                
 
                                
(Adds new prices, comment)
                                
 By Krisztina Than and Sandor Peto
                                
 BUDAPEST, Jan 3 (Reuters) - Central European currencies were
mixed in light trade on Monday, showing little reaction to
factory output data as concerns about debt in the euro zone --
the region's main export market -- remained the main focus.
                                
 Poland's PMI <PLPMI=ECI> rose to 56.3 points in December,
the third highest figure ever and above analysts' forecast of
55.5, mainly thanks to strong exports.
                                
 The Czech PMI <CZPMI=ECI> also rose, to 58.4 from November's
57.3, its fourth-highest level in the survey's history.
                                
 But Hungary's seasonally-adjusted PMI <HUPMI=ECI> fell to
52.9 from a revised 54.8, with imports, exports and new order
figures all showing a decline from the previous month,
indicating slower growth. [ID:nLDE70208Y]
                                
 The crown <EURCZK=> added 0.1 percent against the euro and
was bid at 24.991 at 1104 GMT, while the zloty <EURPLN=> was
flat at 3.956.
                                
 Romania's leu <EURRON=> shed 0.7 percent to 4.269 and the
forint <EURHUF=> weakened by 0.2 percent to 278.39, with both
currencies giving up gains posted before their end-2010 fixing
as Hungary's government marked its first working day as holder
of the European Union's rotating six-month presidency.
[ID:nLDE7020BO]
                                
 "In the next days and weeks Hungarian markets will be in a
stance of waiting for the (economic) measures the government is
due to announce in February," one dealer said.
                                
 "(Regional) turnover is low... normal trade will resume only
after the U.S. returns ... in the afternoon and London
tomorrow," a Budapest-based currency trader said. London and
Tokyo markets were closed on Monday.
                                
 The region's main equity indices rose, gaining 0.9-1.5
percent by 1130 GMT, led by Budapest <.BUX>.
                                
 
                                
 EURO ZONE DEBT CRISIS WATCHED
                                
 Dealers said the debt crisis in the euro zone and efforts
there to curb public debt and deficits would remain key themes
for central European markets this year.
                                
 The forint has been more vulnerable to news about the crisis
than its regional peers due to Hungary's high debt load and
because a large amount of Swiss franc <EURCHF=> debt is held by
Hungarian households.
                                
 "The franc is set to firm further against the euro (and the
forint) and that could change only if the euro zone debt
situation improves or the yuan firms, helping the European
economy," the first dealer said.
                                
 "Now we cannot rule out that he franc will reach 230 against
the forint <CHFHUF=>... and (franc loan holders) cannot do
anything but tighten their belts."
 Komercni Banka said in a note a Czech government reform
drive will also be a key for the crown <EURCZK=>.
                                
 "First months of the year will be key because the government
should introduce details of its reform steps, namely in the area
of pensions," Komercni Bank analyst Jan Vejmelek said.
                                
 "If it fails and the positive fiscal expectations are not
met, investors could react negatively... If it succeeds, we
could see some positive reaction from the side of rating
agencies which would undoubtedly help the domestic currency."
 --------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local
                                
                                  close    currency
                                
                                           change
                                
                                           today
Czech crown      <EURCZK=>   24.991    25.02  +0.12%
Polish zloty     <EURPLN=>   3.956    3.955   -0.03%
Hungarian forint <EURHUF=>   278.39    277.77   -0.22%
Croatian kuna    <EURHRK=>   7.381    7.383  +0.03%
Romanian leu     <EURRON=>   4.269    4.241   -0.66%
Serbian dinar    <EURRSD=>   106.1    105.89   -0.2%

                                
 Yield Spreads
 Czech treasury bonds <0#CZBMK=>
 2-yr T-bond   CZ2YT=RR   -12 basis points to  91bps over bmk*
 7-yr T-bond   CZ7YT=RR   +3 basis points to  +89bps over bmk*
 10-yr T-bond  CZ9YT=RR   +6 basis points to  +98bps over bmk*
 Hungarian treasury bonds <0#HUBMK=>
 3-yr T-bond   HU3YT=RR   +2 basis points to  +672bps over bmk*
 5-yr T-bond   HU5YT=RR    0 basis points to  +596bps over bmk*
 10-yr T-bond  HU10YT=RR   0 basis points to  +489bps over bmk*
 *Benchmark is German bond equivalent.
 All data taken from Reuters at 1204 CET.
 Currency percent change calculated from the daily domestic 
close at 1700 GMT.
                                
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(Reporting by Reuters bureaus, Writing by Krisztina Than;
Editing by John Stonestreet)