CEE MARKETS-Zloty hits 5-month low ahead of S&P ratings review

* Zloty hits 5-month low, forint 4-month low * Risk is downgrade of Poland by S&P after markets close * Bond markets under pressure though ECB may extend bond buying * Regional stock markets mixed By Sandor Peto and Jakub Iglewski BUDAPEST/WARSAW, Dec 2 (Reuters) - The zloty hit a 5-month low due to fears that Standard & Poor's may downgrade Poland's debt rating, while long-dated government bonds remained under pressure in Central Europe.

S&P is expected to review Poland's debt rating late on Friday.

The country got its first downgrade since Communism fell from S&P in January. Its 'BBB+' rating is on negative outlook and a rise in government spending may put further pressure on Poland's ratings, analysts have said.

"We do not expect any (rating) change and such a decision will not affect the zloty's price. But in case of a rating cut EUR/PLN could visit 4.60 (level)," mBank said in a note.

The zloty extended Thursday's losses and touched a new 5-month low against the euro.

It traded at 4.492 at 0918 GMT, near the 4.5 resistance, weaker by 0.4 percent. The forint tracked it, hitting 4-month lows, and eased 0.1 percent to 314.48.

Poland's 10-year government bond yield, at 3.76 percent, was flat as corresponding U.S. yields retreated from 17-month highs.

Key risks are strengthening expectations for Federal Reserve interest rate hikes and fears of a further rise in global long-term yields and of political uncertainty in Europe after Italy's referendum and Austria's presidential election at the weekend.

Pressure on long-dated European bonds was eased by a Reuters report that according to senior sources the European Central Bank will extend its bond purchase programme beyond March.

But Hungary's 10-year bond yield rose 7 basis points to 3.55 percent. It is up by 40 basis points from levels before Donald Trump won the U.S. election on Nov. 8.

The Polish yield is up 70 basis points, despite Warsaw's better credit ratings. It is above Hungary's yield as Budapest's ratings improved to investment grade this year.

Some investors trust that those upgrades will trigger foreign capital inflows later.

But Citigroup, which keeps Polish credit 'underweight', lowered its recommendation for Hungary's foreign currency bonds to "marketweight" in a note as it is "worried about core market sell-off and the contagion effects on EM IG credits.

Nordea analyst Anders Svendsen was optimistic over the forint which he said in a note was undervalued based on economic fundamentals, and could test 300 against the euro next year.

The median forecast of analysts in a Reuters poll published on Thursday showed that the forint could trade near 310 over the next 12 months, while a pick-up in economic growth could help the zloty firm to 4.29 against the euro.

CEE SNAPSHOT AT 1018 CET MARKETS CURRENCIES Latest Previous Daily Chang e bid close change in 2016 Czech 27.0560 27.0625 +0.02 -0.21 crown % % Hungary 314.4800 314.0950 -0.12% 0.05% forint Polish 4.4920 4.4755 -0.37% -5.21 zloty % Romanian 4.5119 4.5124 +0.01 0.16% leu % Croatian 7.5428 7.5455 +0.04 1.28% kuna % Serbian 123.0700 123.0400 -0.02% -1.30 dinar % Note: calculated previous close at 1800 daily from CET change STOCKS Latest Previous Daily Chang e close change in 2016 Prague 884.03 885.05 -0.12% -7.56 % Budapest 29847.60 29998.19 -0.50% +24.

78% Warsaw 1783.44 1783.94 -0.03% -4.07 % Buchares 6883.47 6833.93 +0.72 -1.73 t % % Ljubljan 685.76 687.44 -0.24% -1.49 a % Zagreb 1984.70 1986.23 -0.08% +17.

46% Belgrade 700.92 701.30 -0.05% +8.8 2% Sofia 562.74 563.41 -0.12% +22.

10% BONDS Yield Yield Spread Daily (bid) change vs chang Bund e in Czech sprea Republic d 2-year -0.747 0.005 -001bp +0bp s s 5-year -0.132 -0.01 +026b -1bps ps ps s Poland 2-year 1.964 0.003 +271b +0bp ps s 5-year 2.986 0.015 +338b +2bp ps s ps s FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M inter bank Czech

Hungary Poland Note: are for FRA ask prices quotes ******************************************************** ****** (Additional reporting by Radu Marinas in Bucharest; Editing by Janet Lawrence)