(Adds Serb dinar, details)
WARSAW, Jan 8 (Reuters) - Plunging output data from Hungary
saw its forint lead emerging Europe currencies lower on
Thursday, as an unexepected Czech trade deficit also pointed to
a regional economic slowdown gathering pace.
Hungarian industrial output dived in November and the Czech
trade balance posted a deficit, data showed on Thursday, with a
collapse of demand in Europe taking a larger toll on eastern
Europe and signalling more rate cuts are near. []
At 1149 GMT, Hungary's forint <EURHUF=> lost 0.7 percent to
270.2 per euro and the country's bonds fell across the curve.
The Czech crown <EURCZK=> held steady, while Romania's leu
<EURRON=> shed 0.6 percent to 4.14 to the euro.
"There are a number of things in the basket," a Budapest
trader said. "The central bank would accept a weaker exchange
rate; the impact of the (Russia-Ukraine) natural gas story is
there; the zloty has weakened; and the morning figures do not
trigger optimism either."
Serbia's dinar <EURRSD=> touched new lows, falling 1.5
percent in early trade on concerns over fallout from the
Russia-Ukraine gas spat.
Poland's zloty <EURPLN=>, which has rebounded this week from
late 2008 falls that analysts said was overdone, was also steady
after government assurances that it will push ahead with
ambitious euro adoption plans [].
Central Europe's export-strong economies have been smacked
by the global economic crisis and analysts said the impact of a
halt in Russian gas supplies on industries could aggravate the
situation if the gas dispute between Russia and Ukraine is not
resolved quickly.
In Serbia, the Russia-Ukraine gas row, which has not yet
raised strong investor concern in central Europe, hit the dinar
due to concerns energy monopolies will increase imports.
"There is a growing expectation that power and oil
monopolies will have to step up imports due to the problems with
gas and that the dinar will fall," a senior banker said.
Currencies rallied earlier this week after ending 2008 in a
steep slide and bond markets virtually froze after the financial
crisis swept through central Europe.
The zloty is off 20.8 percent since mid-September when the
demise of Lehman Brothers escalated the global financial crisis.
Hungary's forint, hardest hit at one point before an IMF deal
stabilised the currency, is off 12 percent in the same time, and
the Czech crown has lost 9.7 percent.
Most analysts expect weak economic outlooks and prospects of
more monetary policy easing to weigh in the first half of 2009.
Hungary's policymakers have cut rates in three steps by a
cumulative 150 basis points to 10.0 percent since late November,
but they have still only reversed half of a 300 basis point
emergency hike carried out in October.
The country's central bank governor told Reuters the bank
wanted to cut rates as fast as possible.
The Czechs have cut rates by 150 basis points since August,
with more expected after a steep fall in November export data.
"The trade data (Thursday) are negative news for the Czech
crown and supportive for expectations that the Czech central
bank will cut interest rates again at its next meeting," said
Radomir Jac, chief analyst at Generali PPF Asset Management.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26.174 26.18 +0.02% +2.16%
Polish zloty <EURPLN=> 4.021 4.021 0% +2.28%
Hungarian forint <EURHUF=> 270.22 268.27 -0.73% -2.53%
Croatian kuna <EURHRK=> 7.308 7.298 -0.14% +0.77%
Romanian leu <EURRON=> 4.138 4.113 -0.61% -3.08%
Serbian dinar <EURRSD=> 94.013 93.62 -0.42% -5.07%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -1 basis points to 170bps over bmk*
5-yr T-bond CZ5YT=RR -2 basis points to +149bps over bmk*
10-yr T-bond CZ9YT=RR 0 basis points to +94bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -4 basis points to +333bps over bmk*
5-yr T-bond PL5YT=RR -14 basis points to +268bps over bmk*
10-yr T-bond PL10YT=RR -11 basis points to +223bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -49 basis points to +800bps over bmk*
5-yr T-bond HU5YT=RR -55 basis points to +719bps over bmk*
10-yr T-bond HU10YT=RR +5 basis points to +560bps over bmk*
*Benchmark is German bond equivalent.
All currency data taken from Reuters at 1252 CET.
All bond data taken from Reuters at 0933 CET.
Currency percent change calculated from the daily domestic
close at 1500 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 Dagmara
Leszkowicz; Editing by Andy Bruce)
