* Zloty hits fresh 14-month high, stocks gain
* CEE PMI points to expansion, Greece remains in view
(Updates throughout, adds Serbia dinar)
By Dagmara Leszkowicz and Jason Hovet
WARSAW/PRAGUE, March 1 (Reuters) - Poland's zloty hit a
14-month high on Monday as central European assets firmed on
manufacturing surveys pointing to further expansion, while
investors' attention stayed tuned to Greece's debt battle.
Purchasing managers' indices rose further in February and
indicated better output in the coming months for the core
emerging economies in the European Union, with the Czech survey
at an almost two-year high. []
But the data also showed companies continued shedding jobs,
which will drag on consumer demand, and analysts said recovery
would be bumpy after data started sputtering in recent months.
The zloty <EURPLN=> rose 0.3 percent to bid at 3.937 to the
euro by 1504 GMT, after trading at a high of 3.925 earlier.
Hungary's forint <EURHUF=> touched an almost six-week high
before easing a touch to bid 0.1 percent up on the day at 268.9.
The Czech crown <EURCZK=> added 0.2 percent. Stock markets
followed western peers up, with Budapest <> rising 0.9
percent while Warsaw <> was up 0.3 percent.
"We had quite good PMI showing the momentum is still there
... and economies continue to be in an upward move," Societe
Generale emerging markets strategist Murat Toprak said.
"Also the news we are getting on Greece has been supportive
so far."
The EU urged Greece on Monday to announce new austerity
measures within days to tackle its debt crisis that has shaken
the euro zone and its common currency. []
Central European currencies are expected to post gains this
year on the back of rebounding exports, mainly to western
Europe.
They have held their ground well in the face of Greece's
troubles, with many investors betting on central Europe's better
fiscal position and growth prospects.
"This nervousness (over Greece) is not in (central European)
prices," Toprak said.
REBOUND
Ex-communist central Europe is expected to post a modest
economic recovery this year, with Poland an outperformer.
Polish and Czech central bankers cut interest rates to
record lows last year to support the economy, and with a stable
inflation outlook are not expected to raise interest rates until
the second half of the year.
Polish Deputy Prime Minister Waldemar Pawlak said on Monday
that discussion of rate rises did not make sense as higher rates
could strengthen the zloty, hitting recovery. []
The Polish unit has led the region this year with a 4.2
percent rise. Romania's leu <EURRON=>, with the support of fresh
International Monetary Fund aid, has kept pace with a 3.3
percent rise. It was stuck around 4.11 per euro on Monday.
"The leu is struggling with a technical level at 4.1 per
euro," one dealer in Bucharest said.
On debt markets, Czech bond yields dipped, but showed muted
reaction to ministry plans to issue fewer bonds in the second
quarter than in the first three months of the year. Half of the
supply will come from 10- and 15-year bonds. []
In Serbia, the central bank intervened to add liquidity to a
thin interbank market, boosting the dinar <EURRSD=>. The unit
has been under pressure from importers this year, nearing the
100 per euro level -- a rate not seen in more than a decade.
[]
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.865 25.928 +0.24% +1.75%
Polish zloty <EURPLN=> 3.937 3.947 +0.25% +4.24%
Hungarian forint <EURHUF=> 268.9 269.24 +0.13% +0.54%
Croatian kuna <EURHRK=> 7.255 7.299 +0.61% +0.75%
Romanian leu <EURRON=> 4.104 4.11 +0.15% +3.25%
Serbian dinar <EURRSD=> 99.53 99.41 -0.12% -3.67%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +1 basis points to 99bps over bmk*
7-yr T-bond CZ7YT=RR -4 basis points to +124bps over bmk*
10-yr T-bond CZ10YT=RR -4 basis points to +104bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +2 basis points to +399bps over bmk*
5-yr T-bond PL5YT=RR 0 basis points to +325bps over bmk*
10-yr T-bond PL10YT=RR 0 basis points to +287bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -7 basis points to +533bps over bmk*
5-yr T-bond HU5YT=RR -9 basis points to +475bps over bmk*
10-yr T-bond HU10YT=RR -9 basis points to +434bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1609 CET.
Currency percent change calculated from the daily domestic
close at 1700 GMT.
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(Reporting by Reuters bureaus, writing by Dagmara
Leszkowicz/Jason Hovet; editing by Stephen Nisbet, John
Stonestreet)
