* Region rides continuing global risk appetite
* Successful bond sales in Hungary, Poland spark optimism
(Adds fresher quotes, detail)
By Marton Dunai and Dagmara Leszkowicz
BUDAPEST/WAARSAW, July 21 (Reuters) - Central European
currencies and bonds firmed slightly on Tuesday, benefiting
from another day of a rally of the regions' stocks and still
helped by recent successful bond sales.
At 1422 GMT the forint <EURHUF=> was 0.5 percent stronger to
the euro from Monday's domestic close, while the zloty
<EURPLN=>, the Czech crown<EURCZK=> and the Romanian
leu<EURRON=> gained 0.1 percent.
Stocks in the region rallied again on Tuesday, with Warsaw's
main index, the WIG20 <> touching nine-month highs.
"We have a little profit-taking today, but overall the zloty
is strong, and there's more and more interest in the Polish
unit," said Marcin Bilbin, dealer at Pekao bank in Warsaw. "As
long as the region's stocks rally, currencies will rise as
well."
The zloty also profited from a central banker's remarks that
the country's revised plans for 2014 euro entry were realistic.
[]
Elsewhere in the region the leu was flat, showing little
reaction to comments from Economy Minister Adriean Videanu who
said that Romania's budget deficit may reach 7 percent of GDP,
far above the IMF-agreed 4.6 percent. []
BONDS UP
Regional bond markets were a touch stronger on Tuesday, with
Poland and Hungary benefiting from recent healthy demand for new
issues.
Poland sold $1.5 billion worth of dollar-denominated 10-year
bonds late on Monday. []
"Poland has successfully shown that it can access a range of
funding options, which is vital to fund the slipping budget
balance," said Peter Attard Montalto, an economist at Nomura in
London.
"As a high quality name it is no surprise that it could
retap the bond at this time, and right that they gather together
funding wherever it is available."
Hungarian bond prices firmed in an illiquid market. The
general global optimism maintained upside bias, a dealer in
Budapest said.
"The falls in yields have become a trend, the good sentiment
remains," one Budapest-based fixed income trader said. "The
central bank is expected to cut its interest rates and also the
Hungarian economy has become relatively good in the region."
"Other countries are missing their budget deficit targets,
while we will be able to keep the deficit at around four percent
(of GDP)."
Hungary raised the offer in each of its last two bond
auctions and sold 84.5 billion forints ($437 million) worth of
forint-denominated bonds last week, as well as a 1 billion euro
bond.
The Czech Finance Ministry will also hold a 10-year
government bond auction <CZ1002471=> on Wednesday.
"The bond auction tomorrow might spark some minor selling
interest on the longer end, on the other hand, this would be the
last long-term auction until September, and of relatively small
amount," said Dalimil Vyskovsky, a fixed income trader at
Komercni Banka.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.829 25.845 +0.06% +3.58%
Polish zloty <EURPLN=> 4.271 4.277 +0.14% -3.65%
Hungarian forint <EURHUF=> 271.9 273.2 +0.48% -3.07%
Croatian kuna <EURHRK=> 7.325 7.332 +0.1% +0.55%
Romanian leu <EURRON=> 4.232 4.237 +0.12% -5.14%
Serbian dinar <EURRSD=> 93.07 93.112 +0.05% -3.86%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -25 basis points to 126bps over bmk*
4-yr T-bond CZ4YT=RR -2 basis points to +173bps over bmk*
8-yr T-bond CZ8YT=RR +7 basis points to +301bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -5 basis points to +372bps over bmk*
5-yr T-bond PL5YT=RR -3 basis points to +303bps over bmk*
10-yr T-bond PL10YT=RR -2 basis points to +275bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -23 basis points to +724bps over bmk*
5-yr T-bond HU5YT=RR -61 basis points to +628bps over bmk*
10-yr T-bond HU10YT=RR -48 basis points to +520bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1622 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
(Reporting by Reuters bureaus, Writing by Marton Dunai and
Dagmara Leszkowicz; Editing by Ron Askew)
