(Changes dateline, adds bond markets, fresh comments)
BUDAPEST, Sept 18 (Reuters) - Emerging European currencies
regained some ground on Thursday after coordinated action by the
world's top central banks to inject billions of dollars into
money markets to ease a global funding crunch.
The measures come after an upheaval on financial markets on
fears of more Wall Steet failures after earlier this week Lehman
Brothers <LEH.N> filed for bankruptcy, Merrill Lynch lost its
independence and the U.S. government bailed out insurer AIG.
The European Central Bank said on Thursday it joined forces
with the Fed and central banks of Canada, Switzerland, Japan and
Britain to boost liquidity in global financial markets.
"The coordinated action by the central banks has helped
somewhat (to calm the market) but how long it will last we will
see," a Budapest-based fixed income trader said.
"The market is very hectic and choppy," he said.
Polish bond prices fell in morning trading with dealers
saying the market may recover if industrial output data due
later in the day shows the economy is slowing.
A median forecast in an analyst poll by Reuters expects
industrial production rose 0.2 percent from a year earlier in
August.
A lower-than-expected reading on industrial output may
weaken expectations for more interest rate increases, benefiting
bonds, after the central bank lifted borrowing costs by a total
of 2 percentage points since April last year to stem inflation.
The region's currencies reversed early morning losses but
markets remained very jittery.
"Indirectly I think it's because of the global central bank
measures that we are stronger now," a Hungarian currency dealer
said.
Poland's zloty <EURPLN=>, which slid against the euro at the
open on Thursday, was steady while the Hungarian forint
<EURHUF=> edged 0.33 percent higher to 243.70 per euro and the
Czech crown <EURCZK=> was 0.16 percent higher versus the euro at
0810 GMT.
The ECB and the Bank of England said they would each offer
up to $40 billion in overnight funds to ease a funding squeeze.
The Federal Reserve said it would authorise $180 billion
expansion of temporary foreign currency swap arrangements and the
Bank of Japan announced it would launch dollar-supply operations
as part of the worldwide effort to tackle the dollar shortage.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2008
Czech crown <EURCZK=> 24.09 24.129 +0.16% +9.08%
Polish zloty <EURPLN=> 3.356 3.357 +0.03% +6.79%
Hungarian forint <EURHUF=> 243.7 244.5 +0.33% +3.62%
Croatian kuna <EURHRK=> 7.109 7.109 0% +2.97%
Romanian leu <EURRON=> 3.675 3.664 -0.3% -2.65%
Serbian dinar <EURRSD=> 76.019 76.027 +0.01% +3.48%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -3 basis points to 20bps over bmk*
5-yr T-bond CZ5YT=RR -5 basis points to +20bps over bmk*
10-yr T-bond CZ9YT=RR -1 basis points to +30bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -5 basis points to +269bps over bmk*
5-yr T-bond PL5YT=RR -6 basis points to +228bps over bmk*
10-yr T-bond PL10YT=RR -2 basis points to +185bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -6 basis points to +573bps over bmk*
5-yr T-bond HU5YT=RR -9 basis points to +545bps over bmk*
10-yr T-bond HU10YT=RR -4 basis points to +428bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1028 CET.
Currency percent change calculated from the daily domestic
close at 1500 GMT.
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(Reporting by Reuters bureaus; writing by Krisztina Than;
editing by Stephen Nisbet)
