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CEE MARKETS-Polish data seen showing CPI decline

* Polish annual Dec CPI, due at 1300 GMT, seen falling

* Zloty, forint, crown give up some of Tuesday's gains

* Czech central bank sees overheating risk, watches others

BUDAPEST/WARSAW, Jan 3 (Reuters) - Central European currencies gave up some of their early-year gains on Wednesday ahead of Polish data that could show a retreat in inflation, cutting pressure on the central bank to tighten policy. Analysts expect the figures due at 1300 GMT to show a fall in the annual inflation rate to 2.15 percent in December from 2.5 percent in November, pushed down by food and fuel prices. Poland is usually the first state in the eastern wing of the European Union to report monthly inflation figures, and the region's inflation rates often move in tandem. The figures came on the heels of robust Czech, Hungarian and Polish PMI manufacturing indices released on Tuesday, which confirmed strong economic growth, partly fuelled by a regional surge in wages. The new Polish inflation figures are expected to show a decline. The zloty and the Hungarian forint weakened by 0.1 percent against the euro by 0931 GMT, to 4.1659 and 309.5, respectively. The zloty, which was the world's top-performing currency last year along with the Czech crown, touched its strongest levels since August 2015 on Tuesday. Polish inflation could dip below 2 percent early this year as there are no administered price increases and food prices remain low, ING analysts said in a note. BZ WBK analysts said the inflation drop should not affect Polish government bonds. KBC, however, said in a note that "a slowdown in consumer inflation could trigger some profit taking on the zloty, because it will cool down hopes that the NBP (will) bring (interest rates higher) later this year". Hungary's central bank has been the least worried over a rise in inflation in the region since mid-2016. It has even loosened monetary conditions further. The Czech central bank (CNB), on the contrary, has increased its record low interest rates twice since August to fight inflation. The Czech inflation target is 2 percent, the lowest in Central Europe. In the minutes of its December meeting, it quoted some of its board members as saying that robust wage growth and other labour market indicators reflected a risk of economic overheating. It repeated that the timing of further rate hikes was conditional on macroeconomic variables, including the crown's exchange rate. It added, though, that in many other countries monetary policy was even more accommodative, "and a rising interest rate differential could not be ignored in a small open economy", like the Czech Republic. The crown weakened a quarter of a percent to 25.576 against the euro.

CEE SNAPSHOT AT MARKETS 1031 CET

CURRENCI ES

Latest Previous Daily Change bid close change in 2018 Czech <EURCZK= 25.5760 25.5125 -0.25% -0.13% crown > Hungary <EURHUF= 309.5000 309.1750 -0.11% +0.46% forint > Polish <EURPLN= 4.1659 4.1628 -0.07% +0.25% zloty > Romanian <EURRON= 4.6390 4.6488 +0.21% +0.88% leu > Croatian <EURHRK= 7.4470 7.4605 +0.18% -0.22% kuna > Serbian <EURRSD= 118.6600 118.3700 -0.24% -0.13% dinar > Note: calculated from 1800 CET

daily change

Latest Previous Daily Change close change in 2018 Prague 1087.73 1083.650 +0.38% +0.89%

0

Budapest 39416.62 39443.57 -0.07% +0.10% Warsaw 2467.13 2461.21 +0.24% +0.24% Bucharest 7805.65 7753.74 +0.67% +0.67% Ljubljana <.SBITOP 803.05 806.38 -0.41% -0.41% > Zagreb 1846.71 1839.22 +0.41% +0.21% Belgrade <.BELEX1 745.35 759.80 -1.90% -1.90%

5>

Sofia 682.92 684.71 -0.26% +0.81%

BONDS

Yield Yield Spread Daily (bid) change vs Bund change

in

Czech spread

Republic

2-year <CZ2YT=R 0.6940 0.2180 +132bps +22bps

R>

5-year <CZ5YT=R 0.8810 0.0590 +108bps +7bps

R>

10-year <CZ10YT= 1.6550 0.0000 +120bps +1bps

RR> Poland

2-year <PL2YT=R 1.7340 0.3060 +236bps +31bps

R>

5-year <PL5YT=R 2.6510 0.0010 +285bps +1bps

R>

10-year <PL10YT= 3.3220 0.0040 +287bps +1bps

RR>

FORWARD RATE AGREEMEN

T

3x6 6x9 9x12 3M

interban k

Czech Rep 1.06 1.25 1.38 0.00

<PRIBOR=

>

Hungary 0.03 0.06 0.18 0.03 Poland 1.76 1.81 1.91 1.72

Note: FRA are for ask prices quotes

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(Reporting by Sandor Peto)