* Swiss franc rise against euro hurts CHF/HUF cross
* Prague stocks hit 7-month peak, Warsaw gains 0.9 pct
* Romania debt plans for 2011 seen realistic
(Adds fixed income, Romania debt plan, updates prices)
PRAGUE/BUCHAREST, Dec 29 (Reuters) - Central European stock
markets extended a year-end rally on Wednesday, lifting the
Polish zloty, while investors seeking safer havens drove the
Hungarian forint close to all-time lows against the Swiss franc.
Dealers said the risk-averse behaviour on global markets was
behind the forint's weakening, which put further pressure on
foreign currency borrowers in Hungary.
But along with peers in the region, the forint has ended
2010 broadly stable against the euro, the main reference
currency for central Europe. By 1428 GMT, it <EURHUF=> edged
down less than 0.1 percent to bid at 279.3 per euro.
Poland's zloty <EURPLN=> gained half a percent, pushed
beyond a key 3.98 level by a 0.9 percent rise by Warsaw-listed
shares <>. The Czech crown <EURCZK=> was flat and the
Romanian leu <EURRON=> down 0.2 percent.
Currencies found some support from a year-end rally in
global stocks that also boosted central European equities, with
investors betting on faster economic growth in 2011.
Prague shares <> rose 0.9 percent to hit seven-month
highs, while Bucharest's <> gained 0.4 percent to their
highest in seven weeks.
"Data has been good going into year-end so those who are
still at work are positioning for an early-2011 rally," an
equity trader in Bucharest said.
In Poland, markets expect the finance ministry to try to
support the zloty before a Dec. 31 fixing to avoid breaching
debt levels that, if passed, would trigger spending cuts. A
quarter of Polish debt is in foreign currencies. []
Market sources have told Reuters over the past week that
Poland's state-owned BGK bank was offering euros on the market.
STRONG SWISS FRANC
The Swiss franc was also near a record high against the euro
as investors continued to trade on concerns about the euro zone
debt crisis, which hit the franc/forint pair <CHFHUF=>.
"The franc still cannot calm down, so domestic foreign
currency borrowers can continue to fret (over the CHF/HUF
rate)," brokerage Buda-Cash said in a morning note.
Hungarian bond yields rose 5-10 basis points in thin trade.
One dealer said he expected poor demand at a bond auction
scheduled for Dec. 30.
"A negative surprise tomorrow is more likely but it reflects
a lack of investor interest more than anything else," he said.
He added that comments by Development Minister Tamas Fellegi
that China is considering financing Hungary's debt did not move
markets immediately. []
"We're keeping an eye on that story, but for now we'll just
stick it on the 'uncertainty factors' shelf."
Romania said on Wednesday it plans to sell 4.8 billion lei
($1.47 billion) of domestic debt in January and between 13 and
15 billion lei in the first quarter, a goal analysts say is
realistic given a revival of investor demand.
A decision to ditch a months-long strategy of capping yields
at 7 percent improved the picture for investors, and debt
managers overshot their December issuance plans [].
"They are more focused on extending maturities and ...
demand has improved, and if they were able to sell all that in
December they will also manage in January," said Vlad Muscalu,
an economist at ING Bank in Bucharest.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.332 25.326 -0.02% +3.89%
Polish zloty <EURPLN=> 3.969 3.992 +0.58% +3.4%
Hungarian forint <EURHUF=> 279.3 279.15 -0.05% -3.2%
Croatian kuna <EURHRK=> 7.384 7.381 -0.04% -1.01%
Romanian leu <EURRON=> 4.299 4.287 -0.28% -1.43%
Serbian dinar <EURRSD=> 105.5 106 +0.47% -9.12%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -22 basis points to 78bps over bmk*
7-yr T-bond CZ7YT=RR +3 basis points to +86bps over bmk*
10-yr T-bond CZ9YT=RR 0 basis points to +89bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +6 basis points to +665bps over bmk*
5-yr T-bond HU5YT=RR +3 basis points to +594bps over bmk*
10-yr T-bond HU10YT=RR +7 basis points to +498bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1628 CET.
Currency percent change calculated from the daily domestic
close at 1600 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 Jason Hovet and
Marius Zaharia; Editing by John Stonestreet)
