* Crown slightly stronger ahead of Czech rate decision
* Polish bonds ease on rate hike concerns, switch awaited
(Adds detail, fixed income)
WARSAW, June 23 (Reuters) - The Czech crown was slightly stronger on Wednesday ahead of an interest rate decision, while other currencies mostly slid as poor data from the U.S. housing market added fuel to fears about the global economic recovery.
Markets widely expect the Czech central bank to keep rates on hold at an all-time low of 0.75 percent and money markets have priced in no change in rates before the end of the year. Most analysts expect the first hike in the first part of 2011. [
]"We think stable rates will continue for the rest of 2010, followed by a 50-75bp hike in the first half of next year," analysts at Citigroup wrote in a note.
The central bank's decision is expected at 1100 GMT. A news conference is scheduled for 1200 GMT.
Poland's central bank is also expected to leave interest rates unchanged at a record low next Wednesday, but expectations for a bigger rate hike by the end of 2010 lifted bond yields to near ther highest levels since the start of June.
"Bond yields rose some 4 basis points on Tuesday, and central banker comments on a possible rate hike added fuel to the rises," said Marek Kaczor, a dealer at PKO BP.
A member of the central bank's Monetary Policy Council, Anna Zielinska-Glebocka, told Reuters in an interview that Poland should raise rates by 50 basis points in one move in the autumn from 3.5 percent. [
]Poland will offer five-year bonds maturing in 2015 and 20-year papers maturing in 2029 in exchange for two- and 10-year bonds due in 2010 at a switch tender on Wednesday, with results expected at around 1000 GMT.
The Czech crown <EURCZK=> rose by 0.2 percent against the euro by 0834 GMT, while Hungary's forint <EURHUF=> fell 0.3 percent and Poland's zloty <EURPLN=> was down 0.1 percent.
CONCERNS PERSIST
Romania's leu <EURRON=> was a touch stronger against the euro a day ahead of an expected court ruling on austerity measures, a key factor for securing the country's IMF-led 20 billion euro aid package.
Analysts expect the cuts to pass, but the Constitutional Court has a history of overturning reform packages, making it more difficult for government to keep public spending in check.
"Naturally, there are some concerns about the ruling," said one trader in Bucharest.
Stocks in the region were also in the red on Wednesday, with Prague's bourse <
> leading losses, dragged down by Czech power producer CEZ < > which fell to two-week lows after trading for the first day without dividend rights.U.S. home sales unexpectedly fell in May, raising concerns that the Federal Reserve may present a less upbeat economic outlook later on Wednesday. [
].Central European markets have been under pressure in the past few months from worries of possible contagion from the euro zone debt crisis.
However, the region's better debt and growth outlook prospects have provided downside support and its currencies are seen appreciating this year. --------------------------MARKET SNAPSHOT-------------------- Currency Latest Previous Local Local
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today in 2010 Czech crown <EURCZK=> 25.705 25.745 +0.16% +2.38% Polish zloty <EURPLN=> 4.051 4.048 -0.07% +1.31% Hungarian forint <EURHUF=> 279.65 278.76 -0.32% -3.33% Croatian kuna <EURHRK=> 7.197 7.197 0% +1.56% Romanian leu <EURRON=> 4.22 4.224 +0.09% +0.41% Serbian dinar <EURRSD=> 103.7 103.5 -0.19% -7.54% Yield Spreads Czech treasury bonds <0#CZBMK=> 2-yr T-bond CZ2YT=RR +1 basis points to 157bps over bmk* 7-yr T-bond CZ7YT=RR -1 basis points to +163bps over bmk* 10-yr T-bond CZ9YT=RR -2 basis points to +150bps over bmk* Polish treasury bonds <0#PLBMK=> 2-yr T-bond PL2YT=RR +2 basis points to +417bps over bmk* 5-yr T-bond PL5YT=RR +2 basis points to +385bps over bmk* 10-yr T-bond PL10YT=RR +2 basis points to +318bps over bmk* Hungarian treasury bonds <0#HUBMK=> 3-yr T-bond HU3YT=RR +5 basis points to +623bps over bmk* 5-yr T-bond HU5YT=RR -10 basis points to +566bps over bmk* 10-yr T-bond HU10YT=RR +5 basis points to +490bps over bmk* *Benchmark is German bond equivalent. All data taken from Reuters at 1034 CET. Currency percent change calculated from the daily domestic close at 1600 GMT. For related news and prices, click on the codes in brackets: All emerging market news [
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