* Hungary debt tender goes well, Romania auction eyed
* FX rebound broadly after Spain debt auction
(Adds Hungary tender, quote, updates prices)
By Marius Zaharia
BUCHAREST, June 17 (Reuters) - The forint jumped on Thursday
after Hungary sold all the amount planned at a well-bid bond
tender, while Romanian markets were waiting for the first debt
sale after the government survived a no-confidence vote.
A well covered bond auction in Spain also eased some of the
debt worries in the euro zone and improved risk appetite,
helping central European currencies gain back most of the
morning losses.
Hungary sold all its planned 50 billion forints worth of 3-,
5-, and 10-year bonds at its first such auction since sharp
market falls in early June after government officials compared
Hungary's debt position to that of Greece, in comments which the
cabinet later said were exaggerated. []
Yields rose sharply from previous tenders and were a touch
up from Wednesday's fixing <HUBONDFIX>, but demand was more than
twice the amount offered, improving market sentiment.
At 1016 GMT, Hungary's forint <EURHUF=> was 0.7 percent up
on the day. The Polish zloty <EURPLN=> and the Romanian leu
<EURRON=> were steady, while the Czech crown <EURCZK=> was a
touch weaker, but off morning lows.
Romania tenders 600 million lei of 5-year bonds on Thursday,
two days after the government narrowly survived a no-confidence
vote over a package of painful wage and pension cuts.
The tender will measure how confident investors are that
austerity measures, key for keeping Romania's IMF-led deal
afloat, will be cleared by the Constitutional Court on June 24.
Romania has rejected bids at several tenders over the past
month or accepted only a small part of the offers as investors
-- worried about political risk, social pressure and legal
challenges to spending cuts -- demanded higher yields.
Some dealers say Romania's tender could also be successful
as the risk of an immediate government collapse was off the
table, and mood improved after Hungarian and Spanish debt sales.
Others say the finance ministry will remain picky and wait
for upward pressure on yields to subside. Dealers expect
investors to demand yields of around 7.2 percent.
"They (the ministry) can still say no to yields if they
want," one trader said, adding the ministry was probably hoping
yields investors will ask for will not be over 7 percent.
Finance Minister Sebastian Vladescu told Reuters on Thursday
he was confident the austerity package will overcome legal
challenges and he was not worried over funding this year
[]
CZECH, POLISH BONDS MIXED
Polish bonds yields rose up to 8 basis points after
Wednesday's 10-year bond tender showed demand was only a touch
above the amount sold [].
Central bank Monetary Policy Council (MPC) member Elzbieta
Chojna-Duch told Reuters in an interview the country's budget
assumptions are overly optimistic, adding to worrying comments
about fiscal discipline. []
Yields on longer-dated Czech bonds dropped 2-5 basis points,
with the benchmark 2019 bond <CZ1002471=> yield at a two-week
low and the spread with a similar-dated German bond tightening 5
basis points to 155.
Sentiment on Czech debt improved after a 10-year bond tender
on Wednesday attracted solid demand, even if yields rose
[]
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.724 25.665 -0.23% +2.31%
Polish zloty <EURPLN=> 4.072 4.072 0% +0.79%
Hungarian forint <EURHUF=> 277.98 279.97 +0.72% -2.74%
Croatian kuna <EURHRK=> 7.21 7.21 0% +1.38%
Romanian leu <EURRON=> 4.234 4.232 -0.05% +0.08%
Serbian dinar <EURRSD=> 103.83 103.43 -0.39% -7.66%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -8 basis points to 160bps over bmk*
7-yr T-bond CZ7YT=RR -4 basis points to +157bps over bmk*
10-yr T-bond CZ9YT=RR -7 basis points to +154bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +1 basis points to +412bps over bmk*
5-yr T-bond PL5YT=RR +3 basis points to +375bps over bmk*
10-yr T-bond PL10YT=RR +6 basis points to +311bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR 0 basis points to +629bps over bmk*
5-yr T-bond HU5YT=RR +3 basis points to +581bps over bmk*
10-yr T-bond HU10YT=RR -2 basis points to +485bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1316 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Marius Zaharia;
Editing by Ruth Pitchford)
