* Zloty leads moderate easing regionwide; stocks, bonds slip
* Market eyes data-heavy week, earnings reports
* Hungary's IMF review, Poland bond auction on Weds. key
(Adds details, bonds, updates markets)
By Sandor Peto and Marton Dunai
BUDAPEST, July 12 (Reuters) - Central European currencies
and bonds were marginally weaker on Monday morning, tracking
moves on international markets as investors got ready for a
data-heavy week.
Inflation ground to a halt in the region in June, figures
out on Monday showed, and analysts said central bank interest
rates could remain low in the mid-term. []
The euro fell <EUR=> against the dollar, signalling somewhat
increased risk aversion. Romania's leu <EURRON=>lead mild
losses, dipping a third of a percent against the euro by 0952
GMT, followed by Poland's zloty <EURPLN=>, which shed 0.3
percent.
The Hungarian forint <EURHUF=> gave up 0.2 percent and the
Czech crown <EURCZK=> 0.1 percent versus the euro.
The forint hovered near the key 280 line which it broke
through last week when the region's currencies firmed 1-2
percent, regaining part of the ground lost over the previous
weeks.
"Interest is rather lacklustre," a Budapest-based currency
dealer said. "We await news on all sorts of data coming up this
week, both here and overseas, and perhaps something about the
IMF's review."
The International Monetary Fund (IMF) continues its review
of Hungary's fiscal performance this week, the first since the
new centre-right government took power in May. Investors are
keen to see if the government gets the IMF's blessing for its
handling of the economy.
The region's main stock indices were mixed, with Romanian
stocks <> easing as much as 2.4 percent, Budapest <> --
a strong gainer in the past two weeks -- giving up 0.2 percent,
and the Warsaw bourse <> was up 0.45 percent.
BOND YIELDS CREEP HIGHER
Bond yields edged higher in Poland and Hungary, but trading
remained thin as debt markets were looking ahead to a week of
data releases and key auctions that could set the near-term
direction, dealers said.
Hungary's longer-dated paper eased most, propelled by a
single heavy offer in the seven-year segment, a dealer said.
Other paper, especially short-end ones, eased moderately.
"We are in a consolidation trend, which will probably last
till Wednesday, when we have the 5-year bond tender," said Marek
Kaczor, fixed income dealer at PKO BP Bank in Warsaw. "This may
set market direction."
"Tomorrow's (Polish) inflation should not be market-moving
unless it offers a surprise and differs from forecasts. But the
fact that inflation is easing is already priced-in."
For a preview on Polish inflation, click on: []
Hungary releases June inflation data on Tuesday.
Romanian inflation rose to 4.4 percent in June, in line with
expectations. []
Analysts expect Romania to continue to struggle to sell its
debt after the finance ministry rejected all bids at a tender on
Thursday. [] It has scheduled a tender of 750
million lei worth of 1-year treasury bills on Monday, and
markets are watching whether it accepts yields above a
self-imposed cap of 7 percent.
Czech inflation was 1.2 percent in June, marginally below
forecasts. []
"We keep our positive view on the CZK, thanks to improving
fundamentals and positive expectations associated with the new
centre, reform-minded government, which will be named on July
13," Komercni Banka said.
Three Czech parties building a centre-right coalition
wrapped up six weeks of talks on Friday and should sign an
agreement for a new government at 1600 GMT on Monday, before
being sworn in on Tuesday. []
"The main risks to our bullish scenario are external
factors, particularly risk aversion and the scenario with a
double dip in the euro area," Komercni Banka said.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.313 25.29 -0.09% +3.97%
Polish zloty <EURPLN=> 4.081 4.069 -0.29% +0.56%
Hungarian forint <EURHUF=> 279.71 279.28 -0.15% -3.35%
Croatian kuna <EURHRK=> 7.216 7.181 -0.49% +1.29%
Romanian leu <EURRON=> 4.247 4.233 -0.33% -0.23%
Serbian dinar <EURRSD=> 103.79 103.727 -0.06% -7.62%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +14 basis points to +102bps over bmk*
7-yr T-bond CZ7YT=RR +6 basis points to +138bps over bmk*
10-yr T-bond CZ9YT=RR +6 basis points to +133bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +9 basis points to +401bps over bmk*
5-yr T-bond PL5YT=RR +7 basis points to +378bps over bmk*
10-yr T-bond PL10YT=RR +7 basis points to +323bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +10 basis points to +598bps over bmk*
5-yr T-bond HU5YT=RR +10 basis points to +571bps over bmk*
10-yr T-bond HU10YT=RR +17 basis points to +486bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1152 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Sandor Peto)
