* Hungary c.bank seen cutting rates, but still cautious
* Greek bailout talk lifts markets
* Zloty touches 13-month high, stocks rise
(Adds bonds, quote, Serb dinar)
By Jason Hovet
PRAGUE, Feb 22 (Reuters) - The Polish zloty hit a more than
13-month high on Monday as speculation of a quick bailout for
Greece boosted emerging European assets, keeping the Hungarian
forint stronger before an expected interest rate cut later in
the day.
Warsaw stocks <> rose more than half a percent with
other central European bourses to track global peers higher, but
were off morning highs.
Magazine Der Spiegel reported on Saturday the German finance
ministry has sketched a plan in which euro zone countries would
provide up to 25 billion euros aid to debt-laden Greece.
[]
Greece's problems have rattled markets this year and raised
volatility in central Europe, slowing gains for the region's
currencies which trade more than 2 percent up this year.
By 0835 GMT, the zloty <EURPLN=> bid 0.4 percent higher at
3.969 to the euro, after trading at its strongest since January
2009 at 3.9545 early in the session.
"We're slightly weaker now, as some local importers appeared
at the market, but if the eurodollar bounces back above 1.3650,
the zloty will again attract the level of 3.96 to the euro," a
Warsaw dealer said. "When it breaks 3.95, the next key level is
at 3.90 against the euro."
Hungary's forint <EURHUF=> led gains with a 0.7 percent rise
to 269.8 per euro. The Czech crown <EURCZK=> edged down 0.1
percent to 25.72 per euro, but still near two-month highs.
Romania's leu <EURRON=> was a touch higher at 4.117 to the
euro on Monday after getting International Monetary Fund
approval late on Friday for a $3.32 billion aid payment.
Analysts said that aid would support the leu. []
The Hungarian central bank is seen cutting interest rates by
25 basis points on Monday, maintaining a cautious easing pace as
the forint remains fragile. []
"Higher-than-expected inflation combined with a continued
red alert on Greek-related risk aversion will make it more
difficult than previously thought for the Hungarian central bank
to cut rates today," Danske Bank said.
"Still, a rate cut is more likely than not."
Shorter-dated Hungarian bonds gained, with the yield on the
3-year paper at a 2-1/2 month low. <HU3YT=RR>
Analysts say central European states are in better fiscal
and debt positions than shakier euro zone states like Greece.
The Czech Republic, Poland and Romania have lower public
debt-to-GDP ratios than the euro zone average, while Hungary's
80 percent debt-to-GDP mark is at the average.
ECONOMIC BOOST
Economic recovery fuelled by rising exports to the west is
expected to boost currencies this year, led by the Polish zloty.
Poland is the only EU state to avoid recession last year.
Markets expect Hungarian and Romanian policymakers to lower
interest rates further this year to stimulate growth. Czech and
Polish peers will likely raise interest rates in the second half
of 2010 after cutting to all-time lows last year.
Markets were split on whether Serbia's central bank
would resume its cycle of interest rate cuts. []
The Serbian dinar <EURRSD=> has been hit this year, and
traded at new all-time lows on Monday mainly on corporate demand
for hard currencies to pay for energy imports and repay debts.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.718 25.702 -0.06% +2.33%
Polish zloty <EURPLN=> 3.969 3.983 +0.35% +3.4%
Hungarian forint <EURHUF=> 269.83 271.65 +0.67% +0.19%
Croatian kuna <EURHRK=> 7.292 7.285 -0.1% +0.24%
Romanian leu <EURRON=> 4.122 4.123 +0.02% +2.8%
Serbian dinar <EURRSD=> 99.07 98.81 -0.26% -3.22%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +1 basis points to 86bps over bmk*
7-yr T-bond CZ7YT=RR 0 basis points to +122bps over bmk*
10-yr T-bond CZ10YT=RR -6 basis points to +100bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +1 basis points to +390bps over bmk*
5-yr T-bond PL5YT=RR 0 basis points to +321bps over bmk*
10-yr T-bond PL10YT=RR -1 basis points to +280bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1050 CET.
Currency percent change calculated from the daily domestic
close at 1700 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 Jason Hovet; Editing
by Ruth Pitchford)
