* Currencies rebound, led by forint
* Forint jumps as optimism helps emerging currencies
* IMF mission finishing in Hungary
* Zloty wipes out losses
(Recasts with new prices, comments.)
By Sandor Peto and Jason Hovet
PRAGUE/BUDAPEST, May 18 (Reuters) - Central Europe's main
currencies rebounded on Monday after positive U.S. corporate
news raised market appetite for riskier assets, led by Hungary's
forint which was boosted by demand from a foreign bank.
Poland's zloty, which earlier in the day had led losses in
the region, posted mild gains by late trade.
The currencies eased last week due to a rise in risk
aversion in global markets and economic figures showing that the
global financial crisis had hit the region's economies hard.
The negative news did not continue on Monday. Equities in
the world and in central Europe also rebounded, indicating
higher appetite for risk which helps emerging market assets.
"(The currencies) are tracking the mood in established
markets," said Wolfgang Ernst, analyst at Raiffeisen in Vienna.
The forint <EURHUF=> firmed 1.1 percent against the euro
from Friday and traded at 282.90 at 1421 GMT.
Finance Minister Peter Oszko said Hungary and the IMF had
agreed the country's 2009 budget deficit target would be raised
to 3.9 percent of GDP from 2.9 percent. []
The visiting IMF delegation concluded the quarterly review
of international aid secured by Hungary in October, and an EU
official said the country is on track to receive the third
instalment of its bailout money later this year. []
The rise in the deficit target caused no surprise, but
confirmed that the IMF will not require Hungary to launch
further fiscal cuts which could deepen its recession further.
The Czech crown <EURCZK=> strengthened 0.3 percent to 26.782
against the euro, though dealers said it remained fragile, while
Poland's zloty <EURPLN=> was firmer by 0.1 percent from Friday
at 4.441.
GDP STILL A CONCERN
The currencies fell in the past week due to signs that any
global economic recovery will be slow, while a rally of over 30
percent in stock prices since March cooled.
Stock markets in the region rebounded from early falls on
Monday, with Budapest's BUX index <> gaining over five
percent and Poland's WIG20<> firming two percent, while
Prague's PX <> was still down by 0.2 percent.
World Bank President Robert Zoellick said in Warsaw on
Monday that the global economy may return to growth in late 2009
or in 2010, and that Poland was better positioned than many
other states to weather the global crisis.[]
Hungarian, Czech and Slovak GDP shrank much more than
expected in the first quarter as the global downturn hurt their
export-driven economies.
Strategists expect pressure to remain as the crisis hits
banks further and costs jobs, but they also say global news will
drive risk sentiment.
In Romania, the leu <EURRON=> edged up 0.3 percent against
the euro to 4.169, off a two-week low of 4.2 per euro from the
previous session after data on Friday showed the Romanian
economy shrank 6.4 percent on the year in the first quarter of
2009, more than double economists' forecasts.
Analysts have said that the central bank was likely to cut
interest rates to help the economy, putting pressure on the leu.
Yields on Romania's one-month Treasury bills dropped by
about one percentage point.[]
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26.782 26.855 +0.27% -0.11%
Polish zloty <EURPLN=> 4.44 1 4.445 +0.09% -7.34%
Hungarian forint <EURHUF=> 282.9 286.02 +1.1% -6.84%
Croatian kuna <EURHRK=> 7.38 3 7.377 -0.08% -0.24%
Romanian leu <EURRON=> 4.16 9 4.181 +0.29% -3.71%
Serbian dinar <EURRSD=> 93.957 94.026 +0.07% -4.76%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +3 basis points to 153bps over bmk*
4-yr T-bond CZ4YT=RR +2 basis points to +198bps over bmk*
8-yr T-bond CZ8YT=RR +17 basis points to +284bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -21 basis points to +891bps over bmk*
5-yr T-bond HU5YT=RR -57 basis points to +813bps over bmk*
10-yr T-bond HU10YT=RR -46 basis points to +695bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1621 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet/Sandor
Peto; editing by David Stamp)
