* Fx, stocks, bonds rebound on Greece hope
* Romania's 2009 trade gap narrows
* Czech CPI underpins no rate hike in next months
(Recasts with new comments, prices)
By Jason Hovet and Sandor Peto
PRAGUE/BUDAPEST, Feb 9 (Reuters) - Central European assets
rebounded on Tuesday as hopes for a rescue for euro zone member
Greece grew, lifting the euro against the dollar, while
Romanian data showed a narrowing of the trade deficit in 2009.
Hungary's forint <EURHUF=> and Poland's zloty <EURPLN=> both
gained 0.3 percent versus the euro, while the Czech crown
<EURCZK=> firmed 0.2 percent despite inflation data suggesting a
rise in interest rates was unlikely in the near future.
Romania's leu <EURRON=> also rose and government bond yields
dropped across the region.
The region's key reference currency, the euro firmed versus
the dollar amid talk of possible aid to Greece. []
Greek financial woes have weighed on the assets of Central
European states in recent weeks and analysts say the region will
struggle to resume broader gains until those fears subside.
"News about that will be the key influence until (European
Central Bank President Jean-Claude) Trichet returns from
Australia on Thursday," one Budapest-based trader said.
The region's main equity indices rose, led by Romania's BETI
<> which firmed 2.4 percent by 1508 GMT.
Romania, which like Hungary took International Monetary Fund
(IMF) aid to weather the global crisis, said its trade deficit
shrank by 58.6 percent on the year to 9.7 billion euros ($13.25
billion) in 2009, reducing reliance on external financing.
It also said that it may not need to use all funds from its
20 billion euro aid package. []
Neighbouring Hungary is coming off IMF aid this year, but
its high state debt near 80 percent of gross domestic product
has made its markets vulnerable to news about fiscal problems in
the euro zone's southern periphery.
"The forint can firm slowly further, but it is unlikely to
move beyond 272 (to the euro)," one Budapest-based dealer said.
RESISTANT
Cheuvreux said in a note that emerging Europe, where
external debt is concentrated mainly in the private sector, was
well placed to resist a spillover from the euro zone periphery.
"Indeed, from this perspective, Hungary (the worst performer
amongst EME countries) looks better placed, although clearly
the fact that external borrowing is principally in foreign
currency is the main handicap that places it worse off," it
said.
Hungarian and Romanian interest rates are the highest in the
region, and the two central banks are expected to cut their
rates further in the coming months, while the next expected
moves in the Czech Republic and Poland are hikes.
Czech annual inflation slowed more than expected in January,
signalling interest rates would stay low in the months ahead,
boosting bond prices. []
The central bank is likely to start hiking rates in the
second half of 2010, ending a year-and-a-half easing cycle that
brought rates 275 basis points down to a record low 1 percent.
"We expect inflation will move above the bank's new
inflation target of 2 percent in the second half of the year and
the country could start moving interest rates higher,"
Raiffeisenbank said.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 26.106 26.167 +0.23% +0.81%
Polish zloty <EURPLN=> 4.08 4.092 +0.29% +0.59%
Hungarian forint <EURHUF=> 272.18 272.99 +0.3% -0.67%
Croatian kuna <EURHRK=> 7.32 7.319 -0.01% -0.15%
Romanian leu <EURRON=> 4.126 4.134 +0.19% +2.7%
Serbian dinar <EURRSD=> 98.48 98.84 +0.37% -2.64%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -7 basis points to 107bps over bmk*
7-yr T-bond CZ7YT=RR -9 basis points to +148bps over bmk*
10-yr T-bond CZ10YT=RR -7 basis points to +134bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -3 basis points to +395bps over bmk*
5-yr T-bond PL5YT=RR 0 basis points to +338bps over bmk*
10-yr T-bond PL10YT=RR -2 basis points to +297bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -4 basis points to +563bps over bmk*
5-yr T-bond HU5YT=RR 0 basis points to +531bps over bmk*
10-yr T-bond HU10YT=RR -2 basis points to +478bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1608 CET.
Currency percent change calculated from the daily domestic
close at 1700 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet/Sandor
Peto; Editing by Patrick Graham)
