* Poland gears up for two-round presidential election
* FX stable, fiscal developments still on the radar
* Czech president names Singer as new cbank governor
(Updates with new Czech cbank governor)
By Marius Zaharia
BUCHAREST, June 18 (Reuters) - The zloty edged down and
Warsaw stocks lagged central European peers on Friday ahead of
Poland's presidential election, while the crown was flat as the
Czech president named a new central bank governor.
Regional sentiment got a small lift from Thursday's smooth
bond auctions in Hungary and Spain, fuelling gains for stocks
and stabilising currency markets. []
In Poland, 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 probably be decided in a July 4 run-off.
Markets would probably 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 would probably materialise
after the second round, when any uncertainty regarding the
outcome disappears.
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For a take-a-look on Polish election, see []
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At 1132 GMT, the zloty <EURPLN=>, the Hungarian forint
<EURHUF=> and the Romanian leu <EURRON=> were 0.1 percent weaker
on the day, while the Czech crown <EURCZK=> was flat.
Warsaw's bourse <> was up 0.2 percent, lagging gains
of 0.5-1 percent in Budapest and Prague. Bonds were little
changed in thin trade across the region.
Worries over fiscal discipline have unnerved investors in
central Europe in recent weeks, hitting assets and causing some
debt auctions to fail or fall short, but analysts say the region
is unlikely to suffer a financing crisis. []
NEW CZECH BANK GOVERNOR
Czech President Vaclav Klaus named Miroslav Singer on Friday
as the next central bank governor, replacing Zdenek Tuma
[]. Analysts had expected Singer or vice-governor
Mojmir Hampl to be named.
"It is an excellent choice," said Wood & Co's Raffaella
Tenconi. "He is extremely competent and ... he will also add to
the credibility of the independence of the central bank."
Singer's appointment is not seen influencing the outcome of
Wednesday's central bank meeting, when the bank is widely
expected to leave base rates unchanged at a record low 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 forecast a rise in the second half of 2010.
[]
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 series 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=> 25.708 25.712 +0.02% +2.37%
Polish zloty <EURPLN=> 4.074 4.069 -0.12% +0.74%
Hungarian forint <EURHUF=> 280.37 280.11 -0.09% -3.57%
Croatian kuna <EURHRK=> 7.197 7.203 +0.08% +1.56%
Romanian leu <EURRON=> 4.24 4.235 -0.12% -0.06%
Serbian dinar <EURRSD=> 103.83 103.44 -0.38% -7.66%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -9 basis points to 152bps over bmk*
7-yr T-bond CZ7YT=RR -5 basis points to +167bps over bmk*
10-yr T-bond CZ9YT=RR 0 basis points to +156bps 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 +313bps 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 +491bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1432 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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Other news and reports
World central bank news [] Economic Data Guide <ECONGUIDE>
Official rates [] Emerging Diary []
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(Reporting by Reuters bureaus, writing by Marius Zaharia
Editing by Susan Fenton)
