* Romania rejects all bids at bond tender again
* Demand for Polish 10-year bonds holds steady
* Zloty touches 15-wk high vs euro then slides on US data
(Updates throughout, adds new quotes, Romanian bonds auction)
By Sandor Peto and Marcin Goettig
BUDAPEST/WARSAW, Aug 19 (Reuters) - Central European bonds
and currencies mostly eased on Thursday after weak U.S. data
dented risk appetite, but the Polish 10-year bond held its
ground on steady foreign demand.
Sentiment worsened after the Federal Reserve Bank of
Philadelphia said its index of business conditions in the U.S.
Mid-Atlantic region fell in August to -7.7 from 5.1 in July. The
news followed on the heels of poor U.S. jobs data.
The Polish zloty <EURPLN=>, which briefly touched a 15-week
high against the euro, surrendered its gains to trade down 0.2
percent at 3.947 at 1432 GMT in the wake of the U.S. data.
"The zloty weakened because of the Philadelphia Fed index
which turned out lower than expected. Other currencies in the
region were also impacted," said one Warsaw-based dealer.
The Czech crown <EURCZK=> eased 0.2 percent and Hungary's
forint <EURHUF=> fell 0.1 percent versus the euro. Romania's leu
<EURRON=> was little changed.
Bond yields across the region rose by up to 5 basis points
but the Polish 10-year bond yield was stable at 5.54 percent, a
3.5-month low.
"With respect to the long end of the Polish yield curve, we
still see strong foreign demand, despite next week's switch
tender and high foreign holdings of Polish bonds," said a fixed
income trader from Poland.
"If the tendency of the last few days (for bonds to firm) is
maintained on the Polish bond market, this will translate into
further zloty gains," said Marcin Zoltaniecki, dealer at
Raiffeisen Bank in Warsaw.
"However, yield falls were strong enough to trigger a
correction."
Yields on Polish 10-year bonds fell around 25 basis points
this week as foreign investors opted to buy paper in emerging
economies such as Poland and Turkey with relatively positive
fundamentals that offer much higher yields than their core
market counterparts.
AUCTIONS
The Czechs and Hungarians successfully placed 13-week and
1-year treasury bills respectively on Thursday, but in Romania
the finance ministry rejected all bids at a 5-year T-bond tender
as expected. []
Czech bond yields dropped to lifetime lows at the long end
on Wednesday, with investors bidding for more than twice the
amount on offer at a Czech 15-year bond auction as markets
anticipate less supply of longer maturities ahead.
Hungarian government bond yields rose about 5 basis points
on Thursday, giving up some of the strong gains of the past few
days that had seen the yields hitting 3-month lows.
A Reuters poll showed that the Hungarian central bank (NBH)
was expected to keep its base rate on hold at 5.25 percent next
Monday. []
Elsewhere, in Croatia the kuna <EURHRK=> remained under
pressure after the government's announcement this week that it
is mulling a special tax on banks, similar to Hungary, to help
shore up its public finances.
"We are seeing strong demand for euros from the corporate
sector and institutional investors. The possibility of a new tax
on banks is putting pressure on the kuna," a dealer at a major
foreign-owned local bank said.
The dealer added that a central bank intervention to prop up
the kuna could not be excluded if pressures on the currency
persisted in the coming days.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 24.785 24.752 -0.13% +6.19%
Polish zloty <EURPLN=> 3.947 3.939 -0.2% +3.98%
Hungarian forint <EURHUF=> 277.3 277.07 -0.08% -2.51%
Croatian kuna <EURHRK=> 7.282 7.27 -0.16% +0.37%
Romanian leu <EURRON=> 4.226 4.228 +0.05% +0.27%
Serbian dinar <EURRSD=> 104.53 104.52 -0.01% -8.28%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -1 basis points to 112bps over bmk*
7-yr T-bond CZ7YT=RR +2 basis points to +115bps over bmk*
10-yr T-bond CZ9YT=RR +6 basis points to +118bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -3 basis points to +400bps over bmk*
5-yr T-bond PL5YT=RR +6 basis points to +382bps over bmk*
10-yr T-bond PL10YT=RR +3 basis points to +325bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +3 basis points to +561bps over bmk*
5-yr T-bond HU5YT=RR +7 basis points to +518bps over bmk*
10-yr T-bond HU10YT=RR +7 basis points to +434bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1635 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 Krisztina Than/Sandor Peto, editing by Hugh
Lawson)
