* Leu leads gains, helped by confirmation of better GDP
* Further upside seen regionwide on local data, global mood
* Czech rate cut back on investors' minds as crown strong
(Adds bonds, updates markets, writes through)
By Marton Dunai
BUDAPEST, Dec 3 (Reuters) - The Romanian leu lead Central
European currency gains on Thursday as the weaker dollar
signalled global risk appetite and recent positive news about
local economies could lead to further gains, dealers said.
The leu <EURRON=> added 0.4 percent against the euro by 1005
GMT as the country confirmed the economy shrank by 7.1 percent
in the third quarter, less than a consensus forecast for a 9
percent annual fall. []
"The data create a premise for economic recovery to surface
as early as the first quarter of 2010," said Ionut Popescu,
economic adviser of acting Prime Minister Emil Boc.
The Hungarian forint <EURHUF=> added 0.3 percent versus the
euro, the Czech crown <EURCZK=> 0.2 percent and the Polish zloty
<EURPLN=> 0.1 percent.
"Better fundamentals, better sentiment, Dubai has dropped
off the radar screens -- the zloty has no choice but to
strengthen," said one Warsaw-based dealer.
He also said the next resistance level is at 4.07 against
the euro, but the zloty might break through.
"I see the zloty at 4.00 soon," he added.
"I expect further (forint) strengthening because nothing
seems to curb optimism right now," a dealer in Budapest said.
Arguments are gathering for another interest rate cut in
Prague, where borrowing costs are already at a record low,
leading Czech lender Komercni Banka said in a morning note.
"Short end rates are likely to stay under pressure in such
circumstances as another CNB (central bank) meeting is
approaching and rate cut odds are rising once again," the note
said.
Stock markets also opened higher throughout Europe, and the
Budapest bourse led gains in Eastern Europe, adding 1 percent at
0957 GMT after overnight gains in Asia.
BONDS MIXED
Hungarian bond yields were a touch lower across the curve as
the market got ready for a 50 billion forint bond auction,
closing at 1000 GMT. <HUISSUE>
Czech bond yields showed little change after the finance
ministry released first quarter bond calendar which was slightly
smaller than dealers had expected. []
The ministry has said borrowing in 2010 will stay at record
high levels, similar to those seen this year.
"Later in the afternoon we should know more about the plans
for the whole of 2010 (a total of 280 bln CZK financing needs
already preannounced recently)," Komercni said in its note.
Polish bonds were largely unchanged after a tender on
Wednesday and dealers said they expected lacklustre trading
thoguh the end of the year.
Candidates for the new Polish central bank Monetary Policy
Council, which will take office in January, said Poland should
adopt the euro as soon as possible. That would be realistic in
2015, one of them said. [] []
For a Reuters poll on euro entry, click on <EMUPOLL31>.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.821 25.875 +0.21% +3.61%
Polish zloty <EURPLN=> 4.099 4.104 +0.12% +0.39%
Hungarian forint <EURHUF=> 269.05 269.8 +0.28% -2.04%
Croatian kuna <EURHRK=> 7.311 7.303 -0.11% +0.74%
Romanian leu <EURRON=> 4.219 4.235 +0.38% -4.85%
Serbian dinar <EURRSD=> 95.5 95.66 +0.17% -6.3%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -5 basis points to +100bps over bmk*
7-yr T-bond CZ7YT=RR -6 basis points to +96bps over bmk*
10-yr T-bond CZ10YT=RR -10 basis points to +83bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -4 basis points to +356bps over bmk*
5-yr T-bond PL5YT=RR -6 basis points to +332bps over bmk*
10-yr T-bond PL10YT=RR -3 basis points to +294bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -5 basis points to +520bps over bmk*
5-yr T-bond HU5YT=RR -6 basis points to +480bps over bmk*
10-yr T-bond HU10YT=RR -4 basis points to +419bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1105 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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Eastern Europe spot FX <EEFX=> Middle East spot FX <MEFX=>
Asia spot FX <ASIAFX=> Latin America spot FX <LATAMFX=>
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World central bank news [] Economic Data Guide <ECONGUIDE>
Official rates [] Emerging Diary []
Top events [] Diaries [] Diaries Index []
(Reporting by Reuters bureaus, writing by Marton Dunai;
editing by Patrick Graham)
((marton.dunai@reuters.com; +36 1 327 4742; Reuters Messaging:
marton.dunai.reuters.com@reuters.net))
