* Buoyed by more hopeful news on Japanese nuclear plant
* Hungary forint higher after MPC nominations
* Zloty top gainer, leu close to 9-month highs
* Romania tenders 1-year debt later on Monday
(Adds Hungary details, Poland and Romania bonds)
By Sam Cage
BUCHAREST, March 21 (Reuters) - Emerging European assets
gained on Monday as risk appetite rose on indications the
situation at a Japanese nuclear power plant was improving and
markets eyed the appointment of new rate setters in Hungary.
Hungary's ruling Fidesz party nominated two new members to
the central bank's Monetary Council, who said they would fight
inflation and wanted to ensure the predictability of monetary
policy. The forint <EURHUF=> rose 0.3 percent on the day.
Markets will closely eye the comments and decisions of the
new central bankers in coming months to see if Fidesz, which has
attacked Governor Andras Simor repeatedly in the past year,
would seek to influence monetary policy. []
The nominations were made based on government-sponsored
legal changes enacted earlier this year, which were criticised
by the European Central Bank (ECB) as they had stripped the
governor of the right to nominate two of the four policy makers.
"It looks like the complaints from the EU and the ECB
brought (Fidesz) back to their senses and they nominated rate
setters that are acceptable to markets," a dealer said.
"The fact that the government will not go head-to-head with
the central bank could calm markets."
The central bank raised interest rates <NBHI> by 75 basis
points to 6 percent between November and January citing
inflation risks, but paused last month and analysts did not
expect the appointments to result in a change in interest rate
policy.
Stock markets rose across central Europe, led by Budapest
<> and Bucharest <> as investors picked up riskier
assets after power cables were connected to all six nuclear
reactors at the tsunami-damaged Fukushima Daiichi power plant,
raising hope that Japan can contain its nuclear crisis.
ZLOTY LEADS GAINS
Poland's zloty <EURPLN=> was the region's biggest gainer,
rising 0.5 percent to 4.047 per euro before the delayed release
of current account data for January, due at 1300 GMT. Analysts
expect a deficit of 1.242 billion euro versus a 1.573 billion
euro deficit in December.
"We have a little recovery. The zloty may strengthen further
to 4.02 against the euro," one Warsaw-based dealer said.
Polish bond yields edged higher following rising yields on
core markets, dealers said.
The Czech crown <EURCZK=> was nearly flat and still close to
the 24.400 level against the euro it hovered around for much of
last week. The market is awaiting a central bank policy meeting
on Thursday but 19 of 20 analysts polled by Reuters expect no
change to record low rates, and markets are not pricing in a
first rate hike until June. <CZKFRA> <>.
The Romanian leu <EURRON=> was near flat and trading close
to nine-month highs on indications the recession-hit economy is
slowly picking up and a new loan deal with the International
Monetary Fund, already agreed on a technical level and due to be
rubber stamped on Friday.
Romania will tender 1 billion lei in one-year debt later on
Monday and ING analysts said it could reject all bids as buyers
may demand yields higher than the finance ministry's 7 percent
comfort level.
"It looks unlikely the MinFin will concede this
psychological level at the first try but the probabilities of a
modest allocation at 7 percent and a scenario of rejecting all
bids are very close," they said in a note.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2011
Czech crown <EURCZK=> 24.4 24.426 +0.11% +2.46%
Polish zloty <EURPLN=> 4.047 4.067 +0.49% -2.2%
Hungarian forint <EURHUF=> 271.27 272.14 +0.32% +2.47%
Croatian kuna <EURHRK=> 7.376 7.377 +0.01% +0.05%
Romanian leu <EURRON=> 4.166 4.167 +0.02% +1.61%
Serbian dinar <EURRSD=> 102.79 103.01 +0.21% +3.05%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR 0 basis points to 10bps over bmk*
7-yr T-bond CZ7YT=RR -2 basis points to +65bps over bmk*
10-yr T-bond CZ9YT=RR +2 basis points to +73bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -2 basis points to +334bps over bmk*
5-yr T-bond PL5YT=RR -2 basis points to +329bps over bmk*
10-yr T-bond PL10YT=RR -2 basis points to +306bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1151 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
(Reporting by Reuters bureaus; Editing by Susan Fenton/Toby
Chopra)
