* GDP figures keep mood positive
* Romania, Hungary T-bill auctions eyed
* Hungarian forint breaks 268 per euro
(Adds fixed income, quote)
By Marius Zaharia
BUCHAREST, Nov 16 (Reuters) - The Hungarian forint firmed on
Monday, as signs of a stabilising economic outlook in the region
boosted it beyond a key technical level, despite a weaker GDP
reading compared to its peers last week.
A raft of data across the region on Friday showed the Czech
and Slovak economies were growing versus a quarter ago, Romania
was contracting less than expected, while Hungary and Bulgaria
were struggling to pick up. []
However, the forint <EURHUF=> was 0.4 percent stronger at
1025 GMT, trading at three-week highs, as the regional firming
trend since Friday moved it beyond the key resistance level of
268 per euro, dealers said.
Other currencies traded broadly flat from Friday and were a
shade lower than earlier in the day, when Poland's zloty
<EURPLN=> hit a fresh two month high of 4.085 and the Czech
crown <EURCZK=> hit a six-week top of 25.336.
Analysts expect the forint move to be just a fluctuation in
the regional trend, where the zloty is expected to be the main
gainer over a 12-months horizon.
"Although we do not deny that bullish sentiment... might
push EUR/HUF lower as well, we think the macro backdrop,
particularly the very poor GDP number in regional comparison
does not support this trend," UniCredit said in a note.
"Accordingly we see limited value in short EUR/HUF below 265
and would prefer to play the bullish trend via EUR/PLN."
Stocks rose strongly on Monday, with Warsaw's main index
<> leading the way with a 2.6 percent gain. Bonds in
Hungary and Poland edged up, with yields dropping about 3 basis
points across the curve in both markets.
Traders in Budapest said persistent expectations of central
bank interest rate cuts to come -- the next one on Nov. 23 --
are likely to push yields lower, mainly in short-dated papers.
In Hungary, markets were waiting for comments from the
International Monetary Fund on the review of its aid programme.
AUCTIONS
Hungary plans to sell 40 billion forints worth of six-week
paper. In Romania, 800 million lei in six-month treasury bills
are on offer on Monday. Romania's finance ministry has said it
will not accept yields above 10 percent.
Analysts said markets were unlikely to accept this level and
the risk is that the ministry accumulates arrears that could
drag on an expected economic recovery in the fourth quarter and
or early next year.
An ongoing political crisis that started in October with the
collapse of Romania's government, is expected to last until
after the outcome of a second round of a presidential election
on Dec. 6 and is putting upward pressure on Romanian yields.
The Romanian leu <EURRON=> continued to trade in a narrow
range as fear of central bank interventions continued to offset
worries about political turmoil ahead of a first round of the
election on Sunday.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.495 25.492 -0.01% +4.93%
Polish zloty <EURPLN=> 4.107 4,098 -0.22% +0.19%
Hungarian forint <EURHUF=> 267.5 268.55 +0.39% -1.48%
Croatian kuna <EURHRK=> 7.297 7.3 +0.04% +0.93%
Romanian leu <EURRON=> 4.296 4.298 +0.05% -6.55%
Serbian dinar <EURRSD=> 93.95 94.23 +0.3% -4.76%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -7 basis points to 101bps over bmk*
7-yr T-bond CZ7YT=RR -4 basis points to +110bps over bmk*
10-yr T-bond CZ10YT=RR -4 basis points to +89bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -2 basis points to +368bps over bmk*
5-yr T-bond PL5YT=RR +2 basis points to +319bps over bmk*
10-yr T-bond PL10YT=RR 0 basis points to +276bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -1 basis points to +522bps over bmk*
5-yr T-bond HU5YT=RR +2 basis points to +461bps over bmk*
10-yr T-bond HU10YT=RR +2 basis points to +395bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1225 CET.
Currency percent change calculated from the daily domestic
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(Reporting by Reuters bureaus, writing by Marius Zaharia;
editing by Toby Chopra)
