* Currencies mostly firmer on improved global mood
* Polish retail sales data slightly weaker but zloty unmoved
* Romiania's leu stuck in ranges due to political tensions
(Adds fixed income, detail)
By Dagmara Leszkowicz
WARSAW, Oct 23 (Reuters) - Emerging Europe's currencies were
mostly higher on Friday, bolstered by better global sentiment
and signs of more improvement for Hungary, but little moved by
data out of Poland.
The global sentiment also supported local equities markets,
with Warsaw WIG20 <> rising 1.7 percent.
Hungary's markets were closed on Friday for a holiday but
the forint <EURHUF=> was up 0.3 percent to 264.9 against the
euro at 0849 GMT after central bank deputy governor Julia Kiraly
said the bank might lower interest rates further from the
current 7 percent to help underpin the economy. []
Speaking in Prague, she also said she expected
non-performing loans to peak at around 10 percent in the first
half of next year.
Hungary's bond yields dropped across the curve on Thursday
after the debt agency sold more than the offered 60 billion
forints worth of bonds. []
In Poland the statistics office released data showing retail
sales rose 2.5 percent year-on-year in September, less than an
analysts' forecast of 4 percent [], while
unemployment in the same month stood at 10.9 percent, slightly
less than forecast. []
The data had no impact on Polish bond yields or the zloty
<EURPLN=>, which traded up 0.2 percent from Thursday's close at
4.1790 at 0858 GMT.
"September is a very important month on the sales front
because it shows the trend for the last few months of the year.
It looks like retail sales will stabilise around 2 percent
year-on-year," said Arkadiusz Krzesniak, chief economist at
Deutsche Bank in Warsaw.
Analysts also said the data is neutral for the central
bank's Monetary Policy Council (MPC) and they widely expect
interest rates to stay flat at 3.5 percent at least for a
several months.
Elsewhere on the domestic side, the lower house of the Czech
parliament approved the 2010 state budget draft in the first out
of three readings on Friday, locking in a 162.7 billion crown
deficit. []
The Czech crown <EURCZK=> was slightly up on Friday after it
had touched an 11-week low above 26 per euro in the recent days.
The Czech unit has been pressured this month by expectations of
looser monetary policy.
Romania's leu <EURRON=> was stuck at around 4.29 to the
common currency as political tensions in the country still
remain in focus, dealers said.
The International Monetary Fund said on Thursday it would
start a second review of Romania's aid package later this month,
relenting on previous plans to postpone the mission until a new
government was formed. []
However, the IMF mission chief for Romania, Jeffrey Franks,
said that a follow-up mission may be needed due to "ongoing
political developments".
Markets shrugged off another wobble for Latvia's lat, which
weakened again to the central bank's intervention level as
markets eye the coalition government's efforts to draw up the
2010 budget and any signs of further political tensions.
Latvia has been at the centre of the financial maelstrom
sweeping central and eastern Europe over the past year as the
government tries to maintain the lat currency's peg to the euro
in the face of deep recession.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.922 25.951 +0.11% +3.21%
Polish zloty <EURPLN=> 4.176 4.172 -0.1% -1.46%
Hungarian forint <EURHUF=> 264.9 265.78 +0.33% -0.51%
Croatian kuna <EURHRK=> 7.215 7.215 0% +2.08%
Romanian leu <EURRON=> 4.286 4.288 +0.05% -6.34%
Serbian dinar <EURRSD=> 93.052 93.123 +0.08% -3.84%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +10 basis points to 87bps over bmk*
7-yr T-bond CZ7YT=RR +15 basis points to +106bps over bmk*
10-yr T-bond CZ10YT=RR +10 basis points to +98bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR 0 basis points to +261bps over bmk*
5-yr T-bond PL5YT=RR 0 basis points to +309bps over bmk*
10-yr T-bond PL10YT=RR -2 basis points to +276bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 0949 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 []
Spot FX rates Eastern Europe spot FX <EEFX=>
Middle East spot FX <MEFX=> Asia spot FX <ASIAFX=>
Latin America spot FX <LATAMFX=>
Other news and reports
World central bank news [] Economic Data Guide <ECONGUIDE>
Official rates [] Emerging Diary []
Top events [] Diaries [] Diaries Index []
(Reporting by Reuters bureaus, Writing by Dagmara
Leszkowicz; editing by Patrick Graham/Victoria Main)
