* Forint unmoved by strong data as market eyes election
* Some analysts say Greece's debt crisis could benefit CEE
(Updates throughout)
By Marius Zaharia
BUCHAREST, April 7 (Reuters) - Central European currencies
were little changed on Wednesday, unmoved by weak euro zone
growth data or Hungary's industrial output, while renewed
worries over Greece stretched market nerves.
Some analysts believe a worsening of the Greek debt crisis
could benefit central European assets, at least in the short
term, bringing outflows from the euro zone's periphery into the
region, although others say investors could cut down exposure to
risky assets across the board. []
So far, central European assets have rallied this year,
showing resilience to news from Greece, although there have been
bouts of increased volatility.
Worries over Greece mounted this week following a media
report Greece wanted to renegotiate a deal reached last month
over joint EU-International Monetary Fund aid. []
Greece denied the report.
"All the noise surrounding Greece will continue to spill
over positively into EEMEA as long as there is a sense of denial
that outside support is needed quickly," said Simon
Quijano-Evans, CEE economist at Cheuvreux.
"Indeed, once the IMF does appear more concretely on the
scene in Greece we may be faced with a temporary "turnaround"
situation for some of the CEE currencies, but equities will
remain supported."
Commerzbank's FX strategist in Frankfurt, Lutz Karpowitz,
sees the zloty testing 3.80 per euro over the next three weeks
as investors move outside the euro zone's periphery in search of
assets that look safer, especially in Poland, the only economy
in the European Union that avoided recession last year.
Other currencies have less room to firm. The leu is
virtually frozen around 4.1 per euro due to what market
participants say are central bank indirect interventions, and
the forint is moving sideways pending Sunday's election.
POSITIVE NEWS FOR FX
Favourable domestic developments also made the currencies
resilient to a downward revision of euro zone fourth quarter GDP
figures and a correction in stocks from their highest levels in
18-24 months hit on Tuesday. []
The Polish zloty <EURPLN> was marginally lower at 3.836 per
euro, keeping close to 16-month highs of 3.825. The unit reached
an intraday high of 3.826 on Wednesday, helped by Polish
privatisation prospects, dealers said.
Poland's top insurer PZU [] will launch the
bookbuilding process for Warsaw's largest planned public listing
this year in mid-April. []
The currency has shrugged off an escalating conflict between
the central bank governor and Monetary Policy Council over the
calculations underpinning the bank's 2009 financial report.
[]
The Czech crown <EURCZK=> was a touch stronger, underpinned
by anticipation the government will exchange proceeds from a
planned 1 billion euros eurobond issue within a month on the
currency market [].
Romania's leu <EURRON=> was a shade lower, while Hungary's
forint <EURHUF=> was down 0.3 percent in thin trade.
Hungarian bonds were mixed on Wednesday, but dealers said
further gains were more likely than a retreat.
"We will hold elections on Sunday, true, but in the
following day government bonds worth (almost) 350 billion
forints will expire," one trader said.
Investors remained upbeat on regional debt, as shown by high
demand at debt tenders in Czech Republic and Poland on
Wednesday. [] [].
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.19 25.216 +0.1% +4.48%
Polish zloty <EURPLN=> 3.836 3.835 -0.03% +6.99%
Hungarian forint <EURHUF=> 266.34 265.52 -0.31% +1.51%
Croatian kuna <EURHRK=> 7.27 7.269 -0.01% +0.54%
Romanian leu <EURRON=> 4.095 4.09 -0.12% +3.48%
Serbian dinar <EURRSD=> 99.49 99.46 -0.03% -3.63%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +18 basis points to 75bps over bmk*
7-yr T-bond CZ7YT=RR +4 basis points to +88bps over bmk*
10-yr T-bond CZ10YT=RR -2 basis points to +83bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -1 basis points to +455bps over bmk*
5-yr T-bond HU5YT=RR +6 basis points to +392bps over bmk*
10-yr T-bond HU10YT=RR +4 basis points to +361bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1653 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Marius Zaharia;
Editing by Ruth Pitchford)
