(Repeats story published late on Monday)
By Jason Hovet
PRAGUE, Dec 1 (Reuters) - Poland's zloty and Hungary's
forint led a retreat in central Europe currencies on Monday,
with more signs of a rough economic slowdown piling pressure on
the region's assets and sending stocks lower.
Markets started the final month of the year on a sour note
after grim manufacturing data in some of the world's largest
economies smacked sentiment toward emerging assets.
In central Europe, manufacturing activity fell to record
lows in November according to several surveys, confirming that a
slowdown in Europe, the region's key export market, was taking a
heavy toll on industries.
Poland's purchasing manufacturing fell to an all-time low,
while plans unveiled Sunday by the Polish government for an
anti-crisis package worth 91.3 billion zlotys ($31.40 billion),
failed to provide comfort.
At 1501 GMT, Poland's zloty <EURPLN=> was down 1.4 percent
to 3.836 against the euro, while the Hungary's forint <EURHUF=>
lost 1.2 percent to 262.1 and the Czech crown fell 0.9 percent.
"We will continue to follow global factors," said Andrzej
Bowtruczuk, dealer at BRE Bank in Warsaw. "The anti-crisis plan
of the government is wishful thinking for now, not facts. The
government still assumes high growth, so if growth proves lower,
there may not be enough money for the plan."
Central Europe's currencies have fallen from record highs
seen in the summer, but were firmer last week on stabilising
stock markets. However, focus has again turned to growth.
Most central banks have already started to loosen monetary
policy in response to softening growth outlooks, with more cuts
expected to come in the region.
The Czech central bank chief said on Monday that the Czech
economy will not likely follow the euro zone into recession --
unlike other countries in the region such as Hungary.
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In Romania, where markets were shut for a holiday, the leu
<EURRON=> was 0.5 percent down at 3.80 against the euro, one day
after a general election that is so far too close to call.
Analysts have said Romania could become a victim of the
global financial turmoil due to its high current account
deficit, and markets await the eventual winner, who will likely
to find it difficult to move ahead in addressing these risks.
[]
"We will see a little bit of negative reaction but not
significant, the ultimate factor will be the final coalition
talks and that could take some time," said Jon Levy, analyst
with Eurasia Group in New York.
The region's bond markets were mostly steady on Monday,
while in Hungary the government bought back less state bonds
than expected in an auction [].
"There was a central bank (buyback) auction where there were
slightly fewer players trying to get rid of their papers, and it
was also clear that the bank was not bending over backwards to
accept bigger offers," a fixed income trader said.
Also on Monday, the Czech Finance Ministry said it would tap
foreign debt markets for up to $3.7 billion in 2009 but will
take a cautious approach due to market uncertainty and investor
skittishness that has hammered emerging European bond markets.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2008
Czech crown <EURCZK=> 25.60 25.38 -0.87% +3.39%
Polish zloty <EURPLN=> 3.836 3.791 -1.19% -6.54%
Hungarian forint <EURHUF=> 262.08 258.39 -1.43% -3.65%
Croatian kuna <EURHRK=> 7.132 7.11 -0.31% +2.65%
Romanian leu <EURRON=> 3.808 3.787 -0.55% -6.36%
Serbian dinar <EURRSD=> 89.579 89.645 +0.07% -13.74%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +33 basis points to 200bps over bmk*
5-yr T-bond CZ5YT=RR +21 basis points to +199bps over bmk*
10-yr T-bond CZ9YT=RR +15 basis points to +144bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +12 basis points to +371bps over bmk*
5-yr T-bond PL5YT=RR +14 basis points to +633bps over bmk*
10-yr T-bond PL10YT=RR +11 basis points to +280bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +12 basis points to +891bps over bmk*
5-yr T-bond HU5YT=RR +16 basis points to +835bps over bmk*
10-yr T-bond HU10YT=RR +11 basis points to +575bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1603 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
For related news and prices, click on the codes in brackets: All
emerging market news []
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(Reporting by Reuters bureaus, Writing by Jason Hovet and
Dagmara Leszkowicz; Editing by Toby Chopra)
