* Poland gears up for two-round presidential election
* FX stable, fiscal developments still on the radar
* Czech president names Singer as new cbank governor
(Updates with new Czech cbank governor)
By Marius Zaharia
BUCHAREST, June 18 (Reuters) - The zloty edged down and Warsaw stocks lagged central European peers on Friday ahead of Poland's presidential election, while the crown was flat as the Czech president named a new central bank governor.
Regional sentiment got a small lift from Thursday's smooth bond auctions in Hungary and Spain, fuelling gains for stocks and stabilising currency markets. [
]In Poland, opinion polls tip Bronislaw Komorowski, of the governing Civic Platform party, to win the presidential contest that starts on Sunday, but his challenger Jaroslaw Kaczynski -- the twin brother of the President who died in a plane crash earlier this year -- has narrowed the gap.
The outcome will probably be decided in a July 4 run-off.
Markets would probably cheer a win by Komorowski, fearing Kaczynski could imperil reforms by using the President's right of veto, just as his brother did.
"We suppose markets have already priced in a scenario of close co-operation between the President and the government and we agree that this outcome seems slightly more likely at the moment," Citigroup said in a note.
"Therefore we believe any surprise and any signs of a delayed implementation of reforms would be negative for the zloty and for Polish bonds."
Analysts said any market impact would probably materialise after the second round, when any uncertainty regarding the outcome disappears.
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At 1132 GMT, the zloty <EURPLN=>, the Hungarian forint <EURHUF=> and the Romanian leu <EURRON=> were 0.1 percent weaker on the day, while the Czech crown <EURCZK=> was flat.
Warsaw's bourse <
> was up 0.2 percent, lagging gains of 0.5-1 percent in Budapest and Prague. Bonds were little changed in thin trade across the region.Worries over fiscal discipline have unnerved investors in central Europe in recent weeks, hitting assets and causing some debt auctions to fail or fall short, but analysts say the region is unlikely to suffer a financing crisis. [
]
NEW CZECH BANK GOVERNOR
Czech President Vaclav Klaus named Miroslav Singer on Friday as the next central bank governor, replacing Zdenek Tuma [
]. Analysts had expected Singer or vice-governor Mojmir Hampl to be named."It is an excellent choice," said Wood & Co's Raffaella Tenconi. "He is extremely competent and ... he will also add to the credibility of the independence of the central bank."
Singer's appointment is not seen influencing the outcome of Wednesday's central bank meeting, when the bank is widely expected to leave base rates unchanged at a record low 0.75 percent.
"The majority of the market is forecasting the next move up, next year," a dealer said.
"It is still mainly playing the game of risk appetite."
Nine of 17 analysts surveyed see the next hike in the first half of 2011, five forecast a rise in the second half of 2010. [
]Czech Civic Democrat leader and likely next prime minister Petr Necas is also set to update President Vaclav Klaus on progress in coalition talks.
Elsewhere, Hungary is expected to keep its rates on hold on Monday for the second month in a row after a series of cuts dating back to July 2009. [
] --------------------------MARKET SNAPSHOT-------------------- Currency Latest Previous Local Localclose currency currency
change change
today in 2010 Czech crown <EURCZK=> 25.708 25.712 +0.02% +2.37% Polish zloty <EURPLN=> 4.074 4.069 -0.12% +0.74% Hungarian forint <EURHUF=> 280.37 280.11 -0.09% -3.57% Croatian kuna <EURHRK=> 7.197 7.203 +0.08% +1.56% Romanian leu <EURRON=> 4.24 4.235 -0.12% -0.06% Serbian dinar <EURRSD=> 103.83 103.44 -0.38% -7.66% Yield Spreads Czech treasury bonds <0#CZBMK=> 2-yr T-bond CZ2YT=RR -9 basis points to 152bps over bmk* 7-yr T-bond CZ7YT=RR -5 basis points to +167bps over bmk* 10-yr T-bond CZ9YT=RR 0 basis points to +156bps over bmk* Polish treasury bonds <0#PLBMK=> 2-yr T-bond PL2YT=RR -4 basis points to +408bps over bmk* 5-yr T-bond PL5YT=RR -6 basis points to +372bps over bmk* 10-yr T-bond PL10YT=RR -2 basis points to +313bps over bmk* Hungarian treasury bonds <0#HUBMK=> 3-yr T-bond HU3YT=RR +1 basis points to +630bps over bmk* 5-yr T-bond HU5YT=RR -3 basis points to +572bps over bmk* 10-yr T-bond HU10YT=RR -8 basis points to +491bps over bmk* *Benchmark is German bond equivalent. All data taken from Reuters at 1432 CET. Currency percent change calculated from the daily domestic close at 1600 GMT.
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