* Libya weighs on regional FX
* Forint erases intraday losses after bond tenders
* Czech crown seen up, privatisation inflows may boost zloty
By Radu Marinas
BUCHAREST, Feb 24 (Reuters) - Emerging European currencies
eased on Thursday as rising tension in Libya took its toll on
the region's markets for the third day in a row while the forint
erased intraday losses lifted by successful bond tenders.
Hungary sold 62.5 billion forints ($313.4 million) worth of
government bonds, above plan, with the two new series 5-year and
15-year bonds also attracting decent demand, the Government Debt
Management Agency said. <HUAUCTION02> []
The longest dated tradeable Hungarian security available was
2023 so far.
By 1110 GMT, the Hungarian forint <EURHUF=> bounced back to
bid 0.3 percent up on the day. Dealers said the forint briefly
eased past a resistance level of 274.50-80 earlier in the
session, before the auctions.
The Polish zloty <EURPLN=> recorded the steepest fall of 0.4
percent while the Romanian leu <EURRON=> dipped 0.1 percent. The
Czech crown <EURCZK=> was flat.
"The market had expected good foreign demand for the
Hungarian bonds, the yields look good," said one dealer in
Bucharest.
Elswhere in the region, currencies were impacted negatively
by the situation in the Middle East and North Africa -- a key
factor for risk sentiment at the moment, said Rafal Benecki of
ING Bank in Warsaw.
"We are closing our bullish CEE FX recommendations and
remain constructive on CIS FX," Unicredit said in a note while
BHP said it expected the zloty to remain in a range of 3.97-4.0
to the euro on Thursday.
The zloty lost more than 2 percent of its value since last
Friday also on comments of various monetary policymakers that
dampened expectations for quick interest rate increases.
"Moreover, unrest in Libya should not play in favor of the
zloty either," KBS said in a note.
Polish bonds were weaker on Thursday, tracking the zloty
falls, with yields for the 10-year paper up 4 basis points.
Dealers said, however, they still see zloty gains on the
horizon, helped by likely privatisation inflows.
"Lots of market players opened long PLN position on expected
privatisation inflows and just await results," said one
Warsaw-based dealer.
For privatisation factbox, click: []
"Until then, I expect some of those positions to be closed
on global worries, so in a short term we may see even 4.07 to
the euro, but in a mid-term we are likely to come back to a
positive sentiment."
In Hungary, an announcement of Budapest's new fiscal reform
package is expected next week, and will be closely eyed by
markets and rating agencies to see if measures are sufficient to
ensure the longer term sustainability of Hungary's budget.
"The market has grown somewhat uneasy following the poor
January budget print and the lack of details over the
long-awaited overhaul of economic/budget policies announced by
the Fidesz government," said BNP.
In the Czech Republic, Komercni Banka sees room for
appreciation of the crown in the near future curbed by the
upcoming dividend season and speculation of an early initial
public offering by bank CSOB.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2011
Czech crown <EURCZK=> 24.517 24.524 +0.03% +1.97%
Polish zloty <EURPLN=> 3.993 3.978 -0.38% -0.88%
Hungarian forint <EURHUF=> 273.3 274.23 +0.34% +1.71%
Croatian kuna <EURHRK=> 7.42 7.394 -0.35% -0.54%
Romanian leu <EURRON=> 4.234 4.232 -0.05% -0.02%
Serbian dinar <EURRSD=> 103.01 102.38 -0.61% +2.83%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -10 basis points to 24bps over bmk*
7-yr T-bond CZ7YT=RR -4 basis points to +84bps over bmk*
10-yr T-bond CZ9YT=RR -3 basis points to +87bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +6 basis points to +366bps over bmk*
5-yr T-bond PL5YT=RR +5 basis points to +352bps over bmk*
10-yr T-bond PL10YT=RR +4 basis points to +317bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +3 basis points to +438bps over bmk*
5-yr T-bond HU5YT=RR +1 basis points to +435bps over bmk*
10-yr T-bond HU10YT=RR 0 basis points to +407bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1219 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaux, writing by Radu Marinas; Editing
by Toby Chopra)
