Polish corporate wages surged 7.4 percent in annual terms in October according to figures released on Friday, which could strengthen the case of hawks in the Polish central bank (NBP).

Warsaw is due to release October industrial output, retail

sales and producer price data at 1300 GMT which could nudge the bank towards a rate hike before the last quarter of 2018, which has been projected by most analysts in a Reuters poll.

"If it was not for the collapse of German coalition talks, we would expect the zloty to gain today after the Polish industrial output data," BZ WBK analysts said in a note.

"In our view, these numbers will be positive, further supporting expectations for rate hikes in Poland and bringing up yields on the shorter end of Polish end curve," they said.

They added that the zloty's room to strengthen further was limited after its firming from levels beyond 4.33 against the euro since late September.

The zloty, which has gained 4 percent this year, firmed a shade to 4.236 by 0847 GMT, while Hungary's forint led Central Europe's other main currencies lower.

The withdrawal of small centre-right party FDP from Germany's coalition talks caused some unease among investors in the European Union's emerging economies.

"Risks (in European markets) have mildly increased," Erste analysts said in note in Budapest.

EU political noise is still a force to be reckoned with, said Simon Quijano-Evans, strategist of Legal & General Investment Management in a note.

"CEE members of the EU have the most to lose from any increase in 'core-EU' nationalism coupled with Brexit implications for the 2021-27 EU budget," he said, referring to a fallout of Britain's contributions after it quits the EU.

The forint eased 0.2 percent against the euro to 312.4.

Hungary's central bank, one of the most dovish monetary authorities in the world, may launch new measures at its meeting on Tuesday to push long-term market interest rates lower.

"Such a move could thereby in our view contribute to additional HUF weakening towards 315 against the euro over the coming week," Raiffeisen analyst Wolfgang Ernst said in a note.

"Whereas we currently keep our year-end target of EUR/HUF 310, the chances for a slightly weaker HUF could rise with additional liquidity measures," he said.