CEE MARKETS 2-Zloty, FX steady after stronger Polish GDP data

                                
 * Zloty pares gains from GDP data, region steadies
                                
 * Hungarian budget vote watched
                                
 
  (Adds quotes, details, bonds)
                                
 PRAGUE, Nov 30 (Reuters) - The zloty failed to hold gains on
on Monday after stronger-than-expected Polish growth in the
third quarter, but held steady along with other central European
currencies following last week's Dubai-induced losses.
 Poland's economy, central Europe's largest and the only one
in the region to avoid recession this year, expanded 1.7 percent
in the third quarter, lifted by consumer demand and boding well
for the region's recovery. [ID:nWAR011176]
                                
 Earlier in the day, data showed Czech industry posted its
slowest drop in a year at 7.3 percent, less than analyst
expectations. [ID:nLG435293]
                                
 Polish bonds were little changed after the data and the
zloty <EURPLN=> hovered around 4.14 to the euro by 1117 GMT,
paring some early gains that came after the data as analysts
said a slowing drop in investment in the economy still weighed.
                                
 Strategists have tipped the unit to outperform peers into
next year behind Poland's stronger fundamentals, although
worries over the country's rising debt levels have hindered it
in recent months.
                                
 "The strong growth numbers are not being felt in the fiscal
area and the government cannot be complacent about its budget
deficit because of this data today," said Nomura emerging
economist Peter Attard Montalto.
                                
 "Today's data feed into our view of strong PLN
outperformance next year partly on the euro adoption anchor and
partly as markets realise Poland's macroeconomic
outperformance."
                                
 The Czech crown <EURCZK=>, the region's traditional
safe-haven currency that outgained peers last week in the flight
to safer assets, was off 0.4 percent at 26.15 per euro.
                                
 Markets in Asia and Europe steadied but stayed cautious
after tumbling to end last week as worries that the Dubai debt
crisis could spell trouble for banks and markets beyond the
emirate have sent investors to safer ground. [ID:nHKG291154]
                                
 
                                
 BUDGET VOTE
                                
 Emerging European assets were swept up in worry despite
analysts saying there was no direct link for the region,
although the concern highlighted debt problems that countries
like Ukraine or Hungary still face.
                                
 The Hungarian Parliament is widely expected to approve the
2010 budget in a final vote on Monday as the country aims to cut
the deficit to 3.8 percent of gross domestic product, in line
with its IMF-led aid package obligations.
                                
 The opposition Fidesz party, seen as the victor of next
year's election has said the deficit could actually be twice
that amount. [ID:nGEE5AO2MQ]
                                
 Hungary's forint <EURHUF=> was flat at 272.5 to the euro on
Monday, and Romania's leu <EURRON=> -- with markets eyeing the
run-off presidential vote next weekend -- was steady at 4.271.
                                
 Stock markets recovered, with Warsaw <.WIG20> rising as much
as 1 percent along with Budapest <.BUX>.
                                
 "After the heavy sell-off in emerging markets currencies
last week we can expect some positions to be put on again while
investors have had time to digest the Dubai news during the
weekend," analysts at SEB bank said in a daily note.

--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2009 
Czech crown      <EURCZK=>   26.148   26.042  -0.41%    +2.31%
Polish zloty     <EURPLN=>    4.142    4.141  -0.02%    -0.65%
Hungarian forint <EURHUF=>  272.52   272.57   +0.02%    -3.29%
Croatian kuna    <EURHRK=>    7.311    7.305  -0.08%    +0.74%
Romanian leu     <EURRON=>    4.271    4.271   0%       -6.01%
Serbian dinar    <EURRSD=>   95.03    94.78   -0.26%    -5.84%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond   CZ3YT=RR    -9 basis points to  96bps over bmk*
7-yr T-bond   CZ7YT=RR    -6 basis points to  +121bps over bmk*
10-yr T-bond  CZ10YT=RR    -12 basis points to  +98bps over bmk*

Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond   HU3YT=RR    -11 basis points to  +541bps over bmk*
5-yr T-bond   HU5YT=RR    -11 basis points to  +489bps over bmk*
10-yr T-bond   HU10YT=RR  -12 basis points to  +433bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1218 CET.
Currency percent change calculated from the daily domestic 
close at 1700 GMT.
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 (Reporting by Reuters bureaus, writing by Jason Hovet, editing
by Victoria Main and Toby Chopra)
 ((prague.newsroom@thomsonreuters.com; Reuters Messaging:
jason.hovet.reuters.com@reuters.net; +420-224 190 476))