* Polish zloty little changed ahead of rate decision Tuesday
* Polish rate increase already priced in
* Czech bond yields up after data; Polish bond prices firm
(Adds fixed income, detail)
WARSAW, April 4 (Reuters) - Central European currencies were
mixed on Monday and dealers said they did not expect the zloty
to appreciate markedly against the euro ahead of Tuesday's
Polish central bank decision because a rise in borrowing costs
is already priced in.
A Reuters poll showed 23 out of 29 analysts expect the
central bank's Monetary Policy Council (MPC) to raise rates by a
quarter of a percentage point due to concerns over accelerating
inflation. []
"Since a rate hike has been priced in by the market, it
should not affect the currency significantly," analysts at
Citibank Handlowy wrote in a note.
"But if the council holds fire, it could put additional
pressure on the zloty, taking into account the possibility of
rate increases in the euro zone."
By 0859 GMT the zloty <EURPLN=> fell 0.3 percent to trade at
4.03 against the euro.
At the same time Hungary's forint <EURHUF=> fell 0.4 percent
to the common currency while the Czech crown <EURCZK=> and
Romania's leu <EURRON=> each gained some 0.1 percent.
The forint, the region's top performer this year, has added
almost 5 percent to its value against the euro in the first
three months of 2011 but analysts say worries over the country's
fiscal performance may weigh on the unit further on.
"The strong levels recorded against the euro are ... likely
to be subjected to some serious tests following the publication
of the fiscal balance this week," analysts at Commerzbank wrote
in a note.
"Eighty two percent of this year's budget deficit had been
reached by February."
STRONG DATA
Elsewhere, Czech data showed retail sales rose by 6.5
percent on an annual basis in February, almost double the
forecast of 3.9 percent. []
Czech bond yields moved higher, particularly at the long end
of the curve, after the data but dealers said the reaction to
such a strong reading was relatively subdued.
Polish long-dated bonds, by contrast, were stronger on
Monday, with dealers citing a limited supply of the papers in
the second quarter.
Stocks across the region were mixed in early trade, with
Budapest's BUX <> falling 0.1 percent and Warsaw's PX <>
rising some 0.3 percent.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2011
Czech crown <EURCZK=> 24.42 24.44 +0.08% +2.38%
Polish zloty <EURPLN=> 4.031 4.021 -0.25% -1.81%
Hungarian forint <EURHUF=> 266.21 265.21 -0.38% +4.42%
Croatian kuna <EURHRK=> 7.371 7.351 -0.27% +0.12%
Romanian leu <EURRON=> 4.13 4.133 +0.07% +2.49%
Serbian dinar <EURRSD=> 102.39 103.41 +1% +3.45%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -3 basis points to -5bps over bmk*
7-yr T-bond CZ7YT=RR -3 basis points to +64bps over bmk*
10-yr T-bond CZ9YT=RR 0 basis points to +69bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -2 basis points to +319bps over bmk*
5-yr T-bond PL5YT=RR -4 basis points to +307bps over bmk*
10-yr T-bond PL10YT=RR -4 basis points to +285bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1059 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, Writing by Dagmara Leszkowicz;
Editing by Toby Chopra/Ruth Pitchford)
