* CEE FX retreats, but seen holding onto recent gains
* CPI, GDP data to be in focus this week
(Adds bonds, leu)
By Krisztina Than
BUDAPEST, May 11 (Reuters) - Central European currencies
retreated on Monday morning but were expected to hold onto gains
posted in last week's rally as global sentiment continues to be
supportive for riskier assets, dealers said.
The Polish zloty <EURPLN=> and the Hungarian forint
<EURHUF=>, which led gains last week, opened stronger than late
Friday's levels but retreated from their opening levels.
"The region is easing in a bit of a technical correction
after last week," a Budapest-based currency dealer said.
Hungary's forint was 0.3 percent weaker at around 278.85
from Friday's domestic close by 0900 GMT.
Despite Monday's retreat, improved risk appetite in the
world is seen continuing to support the region.
"Risk appetite in global markets continues to improve and a
stronger-than-expected labour market report in the U.S. on
Friday helped lift sentiment further," Danske Bank said in a
note.
The dollar fell on Monday, hitting its lowest level against
the euro in seven weeks, after U.S. jobs data on Friday.
Data showed on Friday that the U.S. economy shed 539,000
jobs in April, fewer than expected and boosting hopes that the
worst of the economic slump may be over.
This week inflation and gross domestic product data across
the central eastern European region will be key for currencies,
as these two indicators strongly influence the rate outlook.
Following a three-day weekend the Czech crown was 0.1
percent lower on Monday morning.
Dealers said it would follow the region, and it could test
the 26/euro level in the next week or two.
Data in Slovakia, which like the Czech Republic depends
heavily on car and other industrial exports, showed output fell
less than expected in March, although the figure still
represented a steep 18 percent slowdown over the previous year.
INFLATION, GDP DATA EYED
CPI data from Hungary and Poland are expected on Tuesday and
Thursday, respectively. Czech inflation data on Tuesday would
have an effect only if there is a surprise result, a dealer
said.
"Since the Czech central bank has lowered its rates last
week already, the rates and inflation should not influence the
crown too much," Roman Fol, dealer in Raiffeisenbank in Prague,
said.
The Romanian leu <EURRON=> softened versus the euro in early
trading on Monday, after hitting three-week highs last week, due
to a wave of profit taking by with foreign and local players.
"After some gains last week, players stepped in for profit
taking," said one dealer with a foreign bank in Bucharest.
The central bank said last week it was less concerned about
the leu currency after Romania secured a 20 billion euro aid
package from the IMF and other institutions in March, which
opened the way for monetary easing.
Hungarian bond yields climbed 10-15 basis points higher
tracking the forint's retreat, traders said.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26.706 26.678 -0.1% +0.18%
Polish zloty <EURPLN=> 4.375 4.372 -0.07% -5.94%
Hungarian forint <EURHUF=> 278.9 278 -0.32% -5.5%
Croatian kuna <EURHRK=> 7.352 7.354 +0.03% +0.18%
Romanian leu <EURRON=> 4.15 4.138 -0.29% -3.27%
Serbian dinar <EURRSD=> 94.62 94.465 -0.16% -5.43%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +2 basis points to 162bps over bmk*
4-yr T-bond CZ4YT=RR 0 basis points to +202bps over bmk*
8-yr T-bond CZ8YT=RR +17 basis points to +281bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -24 basis points to +839bps over bmk*
5-yr T-bond HU5YT=RR -55 basis points to +761bps over bmk*
10-yr T-bond HU10YT=RR -44 basis points to +633bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1103 CET.
Currency percent change calculated from Friday's domestic
close at around 1700 CET.
(Reporting by Krisztina Than; editing by Andy Bruce)
