* Hungary cuts debt auction 30 percent, yield rises
* Czech 52-week T-bill yield rises 13 bps
* Romania inflation edges up due to weaker leu
* Stocks rise, FX steady; ECB meeting in focus
(adds debt tenders, updates prices)
By Marius Zaharia
BUCHAREST, June 10 (Reuters) - Hungary sold less debt than planned on Thursday at its first T-bill auction since the government announced steps to rein in the budget deficit, as investors remained wary of fiscal problems in central Europe.
Debt agency AKK sold 35 billion forints in 12-month tender, 30 percent less than anticipated, and the yield rose 18 basis points from the previous auction [
]Hungary's plan for a flat income tax, bank levy and some spending cuts to keep this year's deficit at 3.8 percent of GDP was welcomed by the country's foreign lenders and eased market jitters for the time being.
But details of the package have yet to be spelled out, keeping investors on their toes. Yields also rose at a T-bill auction in the Czech Republic. [
]Currencies recovered early losses, tracking euro/dollar moves ahead of an ECB meeting later in the day. Stocks were up around 1 percent.
At 1031 GMT, the Hungarian forint <EURHUF=> traded 0.2 percent lower from the previous close, the Czech crown <EURCZK=> and the Romanian leu <EURRON=> were 0.1 percent weaker, while the Polish zloty <EURPLN=> was up a touch.
"The Hungarian government's action plan on the economy perhaps calmed down the markets," Danske Bank said in a note.
"However that could be short lived as the markets remain unnerved. Hence, we continue to recommend that investors keep an eye on the situation in Hungary."
FISCAL WORRIES
Inflation data from Romania was roughly in line with forecasts and largely ignored by investors who remained focusing on a confidence vote for the government's austerity package next Tuesday.
Drastic pay cuts planned by the government are key for an aid deal led by the IMF, the main anchor for investors willing to finance Romania's huge budget gap.
Romania has rejected bids at four debt tenders over the past six weeks as investors demanded higher yields due to political risk.
"The (inflation) figure should be slightly positive, but I don't expect anything to happen in the market," one dealer in Bucharest said. "What matters at the moment for ... foreign investors is the no-confidence vote."
Bulgarian five-year credit default swaps rose 10 basis points on Thursday, still under pressure from Wednesday's comments from the European Commission expressing concern about the quality of statistics the country reports. [
]Hungary's CDS rose 11 basis points, according to CMA Datavision.
In Poland, a parliamentary committee approved on Wednesday the candidacy of Marek Belka as head of the central bank [
]. Markets cheered his nomination earlier this year but did not react to his comments on Wednesday.He called the zloty as "relatively weak" at current levels and backed currency interventions to avoid high volatility. He also told the committee he thought economic growth was more important than inflation at this stage [
].Polish bonds were steady and Hungarian yields were a touch higher as some investors started to unwind long positions which have dominated the market recently, dealers said. --------------------------MARKET SNAPSHOT-------------------- Currency Latest Previous Local Local
close currency currency
change change
today in 2010 Czech crown <EURCZK=> 25.954 25.934 -0.08% +1.4% Polish zloty <EURPLN=> 4.125 4.127 +0.05% -0.51% Hungarian forint <EURHUF=> 281.52 281 -0.18% -3.97% Croatian kuna <EURHRK=> 7.231 7.238 +0.1% +1.08% Romanian leu <EURRON=> 4.219 4.215 -0.09% +0.44% Serbian dinar <EURRSD=> 103.35 103.803 +0.44% -7.23% Yield Spreads Czech treasury bonds <0#CZBMK=> 2-yr T-bond CZ2YT=RR -3 basis points to 162bps over bmk* 7-yr T-bond CZ7YT=RR +3 basis points to +175bps over bmk* 10-yr T-bond CZ9YT=RR -4 basis points to +166bps over bmk* Polish treasury bonds <0#PLBMK=> 2-yr T-bond PL2YT=RR -4 basis points to +415bps over bmk* 5-yr T-bond PL5YT=RR -4 basis points to +384bps over bmk* 10-yr T-bond PL10YT=RR 0 basis points to +324bps over bmk* Hungarian treasury bonds <0#HUBMK=> 3-yr T-bond HU3YT=RR +5 basis points to +633bps over bmk* 5-yr T-bond HU5YT=RR +8 basis points to +597bps over bmk* 10-yr T-bond HU10YT=RR -1 basis points to +500bps over bmk* *Benchmark is German bond equivalent. All data taken from Reuters at 1331 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 [
] Spot FX rates Eastern Europe spot FX <EEFX=> Middle East spot FX <MEFX=> Asia spot FX <ASIAFX=> Latin America spot FX <LATAMFX=> Other news and reports World central bank news [ ] Economic Data Guide <ECONGUIDE> Official rates [ ] Emerging Diary [ ] Top events [ ] Diaries [ ] Diaries Index [ ] (Reporting by Reuters bureaus, Writing by Marius Zaharia; Editing by Jason Webb, John Stonestreet)