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CEE MARKETS-Fx, stocks ease as ECB seen trying to talk down euro

* Zloty hits multi-year highs vs euro and dollar, retreats Flows into dollar may weigh on CEE fx if ECB talks down euro

* Hungarian bond yields drop after rises, ECB watched

* PKN Orlen Q4 earnings report pushes Warsaw stock index lower

BUDAPEST, Jan 25 (Reuters) - Central European currencies and stocks eased and government bonds firmed on Thursday ahead of the European Central Bank (ECB) meeting where many investors expect it to try to talk down the surging euro. Hungarian government bond yields, after jitters due to a disappointing central bank interest rate swap tender a week ago, dropped 3-4 basis points from Wednesday's fixing. The curve got slightly steeper, with 10-year papers trading at 2.11 percent, one Budapest-based fixed income trader said. "The ECB will be dovish, at least right now that is the general expectation," the trader said. "If not, Bund yields can go up, and the correlation (in the region's markets) with them re-emerge," the trader added. The region's currencies have tracked the euro's surge to 3-year highs against the dollar this week. Attention on how the ECB handles the impact on euro zone foreign trade from the euro's current strength increased after U.S. Treasury Secretary Steven Mnuchin said a weaker dollar was "good for us". Regarding exports, the euro/dollar rate has less importance to Central European states which trade mainly trade with the euro zone. But global flows in and from the dollar often influence their currencies. The region's four main currencies -- the crown, the forint, the leu and the zloty -- all eased slightly against the euro, led by the Hungarian unit, which shed 0.2 percent by 0845 GMT. But all of them stand slightly firmer from the end of 2017. The zloty touched a 2-and-1/2-year high against the euro and a new 3-year high versus the dollar early on Thursday, and stands. It has gained by over 20 percent against the greenback since the end of 2016 and its strengthening made its stocks a lucrative investments for dollar investors. Polis stocks became last year's top performer in the MSCI indices, beaten only by Austria which is in the same region. Austria is a developed market, while the region's other states are classified as emerging markets, but the surge of Vienna equities was fuelled by a rise of banks active in Central Europe, similar to the Warsaw bourse. Regional stock exchanges, after a continuing surge since the end of 2017, dropped on Thursday, led by 0.6 percent decline in Prague. Warsaw's bluechip index shed 0.4 percent, driven by a 3 percent fall in PKN Orlen shares, after the oil group reported a fall in fourth-quarter profits.

CEE SNAPSHOT AT MARKETS 1045 CET

CURRENCI ES

Latest Previous Daily Change bid close change in 2018 Czech <EURCZK= 25.4050 25.3740 -0.12% +0.54% crown > Hungary <EURHUF= 309.5500 309.0500 -0.16% +0.44% forint > Polish <EURPLN= 4.1525 4.1510 -0.04% +0.57% zloty > Romanian <EURRON= 4.6670 4.6640 -0.06% +0.27% leu > Croatian <EURHRK= 7.4340 7.4325 -0.02% -0.05% kuna > Serbian <EURRSD= 118.6200 118.7500 +0.11% -0.10% dinar > Note: calculated from 1800 CET

daily change

Latest Previous Daily Change close change in 2018 Prague 1131.45 1138.570 -0.63% +4.94%

0

Budapest 40739.62 40979.77 -0.59% +3.46% Warsaw 2610.59 2621.59 -0.42% +6.07% Bucharest 8419.27 8436.41 -0.20% +8.58% Ljubljana <.SBITOP 832.55 830.50 +0.25% +3.25% > Zagreb 1869.18 1871.98 -0.15% +1.43% Belgrade <.BELEX1 774.96 776.42 -0.19% +2.00%

5>

Sofia 707.09 706.89 +0.03% +4.38%

BONDS

Yield Yield Spread Daily (bid) change vs Bund change

in

Czech spread

Republic

2-year <CZ2YT=R 0.5330 0.0350 +112bps +3bps

R>

5-year <CZ5YT=R 1.0230 -0.0060 +113bps -2bps

R>

10-year <CZ10YT= 1.7980 0.0010 +121bps +0bps

RR> Poland

2-year <PL2YT=R 1.5530 -0.0030 +214bps -1bps

R>

5-year <PL5YT=R 2.6740 -0.0040 +279bps -1bps

R>

10-year <PL10YT= 3.3500 0.0050 +276bps +1bps

RR>

FORWARD RATE AGREEMEN

T

3x6 6x9 9x12 3M

interban k

Czech Rep 1.02 1.18 1.33 0.77

<PRIBOR=

>

Hungary 0.08 0.12 0.19 0.02 Poland 1.75 1.78 1.86 1.72

Note: FRA are for ask prices quotes

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(Additional reporting by Luiza Ilie in Bucharest/Marcin Goettig in Warsaw)