(Adds fixed income, detail)
WARSAW, Jan 30 (Reuters) - The Hungarian forint fell to an
all-time low on Friday, leading currency losses in central
Europe as poor data overnight prompted investors to withdraw
capital from global emerging markets.
At 0907 GMT the forint <EURHUF=> was 1.6 percent down to the
euro at 294.4 to the euro, dropping as low as 295, while the
Czech crown <EURCZK=> and the Polish zloty <EURPLN=> fell 1.1
percent versus the common currency.
"Recent output data from the Japanese economy, showing
almost 10 percent of contraction in December, caused a huge rise
in risk aversion," said Lukasz Wojtkowiak, FX analyst at
Millennium bank in Warsaw.
"Also the expected data on the U.S growth in the fourth
quarter is likely to show a contraction."
Japan's industrial production fell a record 9.6 percent in
December, while the U.S data are expected to contract by 5.4
percent in the fourth quarter last year.
The bond market in Poland was also weaker, tracking the
zloty, while in Hungary papers remained roughly stable.
"The forint is weakening, this is the regional trend, but
yields have not moved (further) upwards yet today," a
Budapest-based fixed income trader said, adding that on Thursday
yields surged some 70 basis points.
Central Europe's currencies have been hammered starting
2009, with the forint down already 10 percent, as data points to
a sharp slowdown for the region's export-dependent economies
under a fall in demand from the struggling euro zone.
Romania has started talks with the European Commission on a
potential rescue loan to shore up its strained finances, an EU
official said on Thursday, underlining a deepening of financial
woes in eastern Europe. []
Hungary also launched a $4.5 billion budget reshuffle to
combat the economic crisis and data showed Polish growth slowed
at the end of 2008, with several analysts saying it could now
slip into recession in the first half of 2009.
In Poland analysts also said concerns over the 2009 budget
is unsupportive for the debt market.
"There's a concern the government will not be able to
balance this year's budget," said Pawel Bialczynski, dealer at
BRE bank in Warsaw.
Prime Minister Donald Tusk said on Tuesday the government
saw economic growth in 2009 "in the worst case scenario" at 1.7
percent, but urged the cabinet to look for 17 billion zlotys
savings in order to keep this year budget deficit at 18.2
billion zlotys. []
Hungary is already set to contract in 2009, and analysts say
the Czech Republic will likely follow.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 27.871 27.568 -1.09% -4.01%
Polish zloty <EURPLN=> 4.436 4.389 -1.06% -7.24%
Hungarian forint <EURHUF=> 294.4 289.65 -1.61% -10.48%
Croatian kuna <EURHRK=> 7.365 7.365 0% 0%
Romanian leu <EURRON=> 4.261 4.242 -0.45% -5.79%
Serbian dinar <EURRSD=> 94.168 94.05 -0.13% -4.98%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +3 basis points to 110bps over bmk*
4-yr T-bond CZ4YT=RR +2 basis points to +108bps over bmk*
8-yr T-bond CZ8YT=RR -5 basis points to +118bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -1 basis points to +326bps over bmk*
5-yr T-bond PL5YT=RR -3 basis points to +271bps over bmk*
10-yr T-bond PL10YT=RR -5 basis points to +250bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +5 basis points to +850bps over bmk*
5-yr T-bond HU5YT=RR +8 basis points to +781bps over bmk*
10-yr T-bond HU10YT=RR +10 basis points to +620bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 0907 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 []
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(Reporting by Reuters bureaus, Writing by Dagmara
Leszkowicz, Editing by Andy Bruce)
