* FX mixed, fears over euro zone contagion remain
* Ukraine's presidential election not seen affecting region
* Czech trade balance data should help crown further
(Adds fixed income, detail)
By Dagmara Leszkowicz
WARSAW, Feb 8 (Reuters) - Central Europe's currencies were
mixed on Monday, staying mostly near their previous closing
levels, but they remain vulnerable to fresh pressure from
concerns over debt in the euro zone periphery.
Fears that heavily indebted smaller euro zone economies such
as Greece may be unable to cope with the fiscal and monetary
demands of membership have subsided somewhat for now.
"We still feel that the Greek turbulence is not over and
eastern European assets are vulnerable in this environment,"
analysts at SEB wrote in a note.
By 1047 GMT the Czech crown <EURCZK=> and Romania's leu
<EURRON=> were both 0.1 percent stronger against the euro, while
Hungary's forint <EURHUF=> and the Polish zloty <EURPLN=> were
0.1 percent weaker.
Regional stocks were all in positive territory on Monday
after sharp falls last week, with Budapest BUX <> leading
gains, rising some 1.2 percent.
"Everything is a bit firmer, sentiment is slightly more
positive, stock markets are stronger. For the time being (the
forint) seems to have bottomed at 272.80, but turnover is low,"
another Budapest-based dealer said.
Dealers said Ukraine's presidential election, where
opposition leader Viktor Yanukovich claimed victory, should not
affect the wider region, although Ukrainian markets are likely
to be volatile in coming days.
"Since the eyes of the market are directed at the euro zone,
Ukraine is not an emotional matter for us now," one Warsaw-based
dealer said.
APPRECIATION?
Poland's Finance Minister Jacek Rostowski said in an
interview for daily newspaper Polska he saw no reason for a
further strengthening of the zloty.
Separately, Deputy Prime Minister and Economy Minister
Waldemar Pawlak told weekly Wprost that rapid appreciation of
the unit could hurt exports and dent the pace of recovery.
[]
Poland is the only European Union member state that avoided
a recession last year, expanding by 1.7 percent in 2009 mainly
thanks to robust internal demand and a weaker currency which
gave exporters an advantage over euro zone competitors.
The zloty has lost 2 percent of its value against the euro
since hitting 13-week highs at the start of February. Other
currencies have also been hit in recent days, though not as much
as the zloty.
Elsewhere, data released on Monday showed Czech unemployment
rose to a slightly higher than expected 9.8 percent in January
from 9.2 percent in the previous month. Other data showed the
Czech trade surplus fell to 2.81 billion crowns in December.
<ECONCZ>
Analysts expect the favourable Czech trade balance to help
lift the crown this year.
"The foreign trade surplus may still reach a CZK 130 billion
area in 2010 and foreign trade developments should thus remain a
positive factor for the Czech crown performance in months and
quarters to come," said Radomir Jac, chief analyst with Generali
PPF Asset Management.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26.084 26.105 +0.08% +0.9%
Polish zloty <EURPLN=> 4.087 4.083 -0.1% +0.42%
Hungarian forint <EURHUF=> 273.05 272.9 -0.05% -0.99%
Croatian kuna <EURHRK=> 7.317 7.319 +0.03% -0.11%
Romanian leu <EURRON=> 4.131 4.134 +0.07% +2.58%
Serbian dinar <EURRSD=> 98.47 98.499 +0.03% -2.63%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -2 basis points to 108bps over bmk*
7-yr T-bond CZ7YT=RR +3 basis points to +151bps over bmk*
10-yr T-bond CZ10YT=RR -1 basis points to +138bps over
bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -1 basis points to +398bps over bmk*
5-yr T-bond PL5YT=RR 0 basis points to +337bps over bmk*
10-yr T-bond PL10YT=RR -1 basis points to +300bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -2 basis points to +565bps over bmk*
5-yr T-bond HU5YT=RR 0 basis points to +532bps over bmk*
10-yr T-bond HU10YT=RR -1 basis points to +483bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1047 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 Ruth Pitchford)
