* Hungary govt to hold press conference on fiscal measures
* Czech crown unmoved by government row
(Adds detail on Poland, Hungary fiscal policy, c/a data)
By Sam Cage
BUCHAREST, April 13 (Reuters) - The Polish zloty rose on
Wednesday on expectations inflation data due later in the
session could point to further interest rate rises, while other
emerging Europe currencies were mixed.
Analysts expect Polish March inflation to rise slightly to
3.8 percent year-on-year, still well above the top end of the
central bank's target range of 2.5 percent plus/minus 1
percentage point. []
A higher-than-expected reading, due at 1200 GMT, would
bolster the case for more than the two further interest rate
moves this year currently expected by economists.
Poland will also release February current account data at
1200 GMT and auction new 2-year bonds worth 3.5-5.5 bln zlotys.
[] []
"The risk of (inflation) hitting 4 percent, which would mark
May as another month for tightening, may result in poor demand
for the two year auction," said ING's Grzegorz Ogonek.
The zloty <EURPLN=> rose 0.3 percent to 3.974 per euro by
0951 GMT and bond yields were largely flat from the previous
session.
In Hungary, markets were eyeing a press conference by
Economy Minister Gyorgy Matolcsy about the government's fiscal
plans at 1200 GMT. They will be looking for any further details
on planned measures to keep the budget deficit below 3 percent
of GDP next year and also when big one-off crisis taxes will
expire by 2013.
Hungary has to submit its updated convergence programme to
Brussels later this week which is expected to contain details on
the fiscal measures.
Hungary's forint <EURHUF=> slipped 0.2 percent to 266.8 per
euro, stuck in a range between 265.80 and 267.
"If international sentiment improves again the forint may
strengthen past 266 to the euro but we cannot expect a serious
firming," Takarekbank said in a note.
Stocks rose across the region, led by a 0.7 percent gain on
the Prague bourse <>.
CROWN UNMOVED
The Czech crown <EURCZK=> was unmoved by the breakdown of
talks between government parties on Tuesday after the smallest
coalition partner refused to bend to the prime minister's demand
for the dismissal of its key minister. []
Analysts, however, said it would only be a matter of time
before markets started pricing in risks to a government that has
so far done well on fiscal policy and reining in the budget
deficit.
Bond yields ticked up, after falling in the previous
session, before an auction due later in the day.
"The paper is linked to the 12M PRIBOR rate, which will
probably attract slightly less demand than was the case in the
last few auctions, but we still expect a good demand," Komercni
Banka traders said.
The Czech current account showed a 15.95 billion crown
($944.9 million) surplus in February, a turnaround from a 0.31
billion crown deficit in January. []
Romania's current account deficit shrank 94 percent
year-on-year to 44 million euros ($63.65 million) in the first
two months of the year, central bank data showed.
[]
The leu <EURRON=> was unmoved by the data and traded 0.1
percent lower on the day.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2011
Czech crown <EURCZK=> 24.409 24.403 -0.02% +2.42%
Polish zloty <EURPLN=> 3.974 3.984 +0.25% -0.4%
Hungarian forint <EURHUF=> 266.8 266.24 -0.21% +4.19%
Croatian kuna <EURHRK=> 7.366 7.364 -0.03% +0.19%
Romanian leu <EURRON=> 4.112 4.108 -0.1% +2.94%
Serbian dinar <EURRSD=> 101.12 101.1 -0.02% +4.75%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -3 basis points to -13bps over bmk*
7-yr T-bond CZ7YT=RR 0 basis points to +44bps over bmk*
10-yr T-bond CZ9YT=RR -3 basis points to +55bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -5 basis points to +312bps over bmk*
5-yr T-bond PL5YT=RR -1 basis points to +298bps over bmk*
10-yr T-bond PL10YT=RR -3 basis points to +268bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -4 basis points to +437bps over bmk*
5-yr T-bond HU5YT=RR -2 basis points to +412bps over bmk*
10-yr T-bond HU10YT=RR -3 basis points to +363bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1251 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
(Reporting by Reuters bureaux; Editing by Susan Fenton)
