* Poland gears up for two-round presidential election
* Other FX edge up, fiscal developments still on the radar
* Czech president to name new c.bank governor at 1100 GMT
(Adds stocks, fixed income, detail)
By Marius Zaharia
BUCHAREST, June 18 (Reuters) - The zloty and Warsaw stocks
lagged their central European peers on Friday, ahead of Poland's
presidential election, after broader sentiment got a small lift
from Thursday's smooth bond auctions in Hungary and Spain.
Opinion polls tip Bronislaw Komorowski, of the governing
Civic Platform party, to win the presidential contest that
starts on Sunday, but his challenger Jaroslaw Kaczynski -- the
twin brother of the president who died in a plane crash earlier
this year -- has narrowed the gap.
The outcome will likely be decided during a July 4 runoff.
Markets would likely cheer a win by Komorowski, fearing
Kaczynski could imperil reforms by using the president's right
of veto, just as his brother did.
"We suppose markets have already priced in a scenario of
close co-operation between the president and the government and
we agree that this outcome seems slightly more likely at the
moment," Citigroup said in a note.
"Therefore we believe any surprise and any signs of a
delayed implementation of reforms would be negative for the
zloty and for Polish bonds."
Analysts said any market impact will likely materialise
after the second round, when any uncertainty regarding the
outcome will disappear.
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For a take-a-look on Polish election, see []
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At 0918 GMT, the zloty <EURPLN=> was 0.2 percent weaker on
the day, while the Czech crown <EURCZK=> and the Hungarian
forint <EURHUF=> were a touch stronger.
Warsaw's bourse <> was 0.2 percent up, lagging gains
of at least half a percent in Budapest and Prague. Bonds were
little changed in thin trade across the region.
Sentiment improved in the region after worries of contagion
from euro zone debt woes were eased by a well covered auction in
Spain, while regional fiscal concerns were also cooled by a
smooth Hungarian tender. []
But Romania sold less than it planned to on Thursday after
the government narrowly survived a no-confidence vote on Tuesday
over a package of painful wage and pension cuts, needed to meet
the terms of an IMF/EU aid package. []
Romania's leu <EURRON=> was 0.2 percent down in thin trade.
NEW CZECH BANK GOVERNOR
Markets in the Czech Republic are awaiting an announcement
from the presidency naming the new central bank governor at 1100
GMT. Analysts and media have said vice-governors Miroslav Singer
and Mojmir Hampl are the most likely candidates.
[].
The new governor is not expected to influence the outcome of
Wednesday's central bank meeting, which is widely expected to
leave base rates unchanged at a record low of 0.75 percent.
"The majority of the market is forecasting the next move up,
next year," a dealer said.
"It is still mainly playing the game of risk appetite."
Nine of 17 analysts surveyed see the next hike in the first
half of 2011, five in the second half of this year.
[]
Czech Civic democrat leader and likely next Prime Minister
Petr Necas is also set to update president Vaclav Klaus on
progress in coalition talks.
Elsewhere, Hungary is expected to keep its rates on hold on
Monday for the second month in a row after a run of cuts dating
back to July 2009. []
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.677 25.712 +0.14% +2.5%
Polish zloty <EURPLN=> 4.075 4.069 -0.15% +0.71%
Hungarian forint <EURHUF=> 279.98 280.11 +0.05% -3.44%
Croatian kuna <EURHRK=> 7.197 7.203 +0.08% +1.56%
Romanian leu <EURRON=> 4.242 4.235 -0.17% -0.11%
Serbian dinar <EURRSD=> 103.8 103.44 -0.35% -7.63%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR 0 basis points to 161bps over bmk*
7-yr T-bond CZ7YT=RR -6 basis points to +166bps over bmk*
10-yr T-bond CZ9YT=RR -1 basis points to +154bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -4 basis points to +408bps over bmk*
5-yr T-bond PL5YT=RR -6 basis points to +372bps over bmk*
10-yr T-bond PL10YT=RR -2 basis points to +312bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +1 basis points to +630bps over bmk*
5-yr T-bond HU5YT=RR -3 basis points to +572bps over bmk*
10-yr T-bond HU10YT=RR -8 basis points to +490bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1218 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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Middle East spot FX <MEFX=> Asia spot FX <ASIAFX=>
Latin America spot FX <LATAMFX=>
Thomson Reuters Equity Emerging Markets Europe Index (Total
Return) <.TRXFLDEETU>
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 Marius Zaharia
Editing by John Stonestreet)
