(Adds new comments, details)
By Sandor Peto and Marius Zaharia
BUDAPEST/BUCHAREST, Dec 12 (Reuters) - Central European
currencies and stocks fell on Friday due to the collapse of a
U.S. auto sector bailout and a raft of poor economic data, with
the Polish zloty leading losses, pummelled by corporate worries.
The U.S. Senate failed to reach a compromise over a proposed
$14 billion rescue plan for the country's ailing carmakers, some
of them with business in eastern Europe, heightening fears of
recession worldwide.
In the region, data showed on Friday Hungarian and Czech
industries contracted in October [], while in
Poland, analysts expect output to fall in November, from a
slight growth the previous month.
The Hungarian forint <EURHUF=> traded 1.2 percent weaker at
265.85, recovering a small part of earlier losses in late trade.
"The early weakening was caused by the international news,
bourses fell quite significantly on the U.S. news," one
Budapest-based dealer said.
The Czech crown <EURCZK=> was 0.85 percent weaker by 1305
GMT at 26 per euro, after dropping briefly to a seven-week low
of 26.065 after the release of the output data.
"The crown has nothing positive ahead for it in the near
term," said a Prague-based dealer. "People are following things
like the euro/zloty, shares, and Czech macroeconomic data, which
are and will continue to be very bad.
But like for most of the week, the most battered currency
was again the Polish zloty <EURPLN=>, which plunged 2.1 percent.
The unit, which has lost a quarter of its value since July,
has been hit in recent days by worries that Polish companies may
have to write off large amounts of euros after hedging contracts
went the wrong way due to the unit's earlier losses.
"This ongoing story with FX contracts is very unsupportive
for the currency," a Warsaw dealer said.
Polish current account deficit <PLCAM=ECI> came out wider
than expected, adding to the gloom [].
Romania external shortfall data [] was also
released on Friday, but it showed a slower expansion rate and
hinted of a lower-than-expected profit repatriation in October.
The leu <EURRON=> traded 0.6 percent weaker at 3.925 per
euro, continuing its patient depreciating trend.
The currency has eased in recent weeks as corporates' demand
for euros increased and political uncertainty over the outcome
of a Nov. 30 parliamentary election kept foreign players away.
Meanwhile, the Democrat-Liberal Party and the leftist Social
Democrats that finished almost tied in the Nov. 30 parliamentary
election, will continue negotiations to form a coalition
government and are expected to reach a deal by Sunday.
In equity markets, Budapest's BUX index <> fell by 4.5
percent to 12,117, Prague's PX <> declined by 2.9 percent to
822.9 and Warsaw's WIG <> shed 2.3 percent to 27,527.
In fixed income markets, Hungarian government bond (HGB)
yields rose by about 30 basis points in quiet trade.
"I can imagine that yields will return to their recent
falling pattern in the short term as issuance next year will be
low," one trader said.
Raiffeisen Bank recommended HGB for buying on the
three-month to three-year horizon in its weekly regional report.
"We anticipate accelerating buying demand for the coming
months hence another HGB rally can be expected," it said.
Polish bond yields were unchanged.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2008
Czech crown <EURCZK=> 26 25.78 -0.85% +1.88%
Polish zloty <EURPLN=> 3.946 3.865 -2.1% -9.6%
Hungarian forint <EURHUF=> 265.85 262.66 -1.21% -5.14%
Croatian kuna <EURHRK=> 7.181 7.181 0% +1.99%
Romanian leu <EURRON=> 3.925 3.901 -0.62% -9.63%
Serbian dinar <EURRSD=> 87.459 86.51 -1.1% -11.04%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +4 basis points to 168bps over bmk*
5-yr T-bond CZ5YT=RR +20 basis points to +148bps over bmk*
10-yr T-bond CZ9YT=RR +5 basis points to +102bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR 0 basis points to +351bps over bmk*
5-yr T-bond PL5YT=RR -3 basis points to +291bps over bmk*
10-yr T-bond PL10YT=RR -2 basis points to +242bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +27 basis points to +729bps over bmk*
5-yr T-bond HU5YT=RR +7 basis points to +663bps over bmk*
10-yr T-bond HU10YT=RR -7 basis points to +482bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1705 CET.
Currency percent change calculated from the daily domestic
close at 1500 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 Sandor Peto;
Editing by Tony Austin/Victoria Main/Andy Bruce)
