* Currencies take late hit on lower U.S. sentiment data
* Czech crown withstands slump after surprise GDP rise
* Romania sells 447 mln euro bonds
(adds detail, comments, updates market)
By Marius Zaharia and Marton Dunai
BUCHAREST/BUDAPEST, Aug 14 (Reuters) - Czech assets were the
only exception to a slump in Central European markets late on
Friday, aided by a surprise quarterly rise in its GDP as U.S.
consumer confidence depressed global emerging markets.
The forint <EURHUF=> led losses with a 0.7 percent fall at
1413 GMT, with the zloty <EURPLN=> following behind, losing 0.3
percent versus the euro. The Romanian leu <EURRON=> lost 0.1
percent.
The crown <EURCZK=> gave back some gains but stayed clear of
negative territory, helped by data that showed the Czech economy
grew 0.3 percent in the second quarter [], in line
with a rise in Germany and ending half a year of recession.
Dealers said regional cross trades built up earlier had also
contributed to the crown's relative strength.
"There were PLN/CZK and HUF/CZK crosses built up and when
the forint and the zloty began to weaken, those positions were
liquidated, resulting in crown support," said a dealer with one
Hungarian bank.
Debt markets were mixed. In Hungary, yields rose a touch as
investors began to price in expectations of a 50-basis-point cut
at the next meeting of the country's central bank on August 24.
Czech bonds were quiet, and in Poland, prices recovered
somewhat after a sell-off driven by higher than expected
inflation data on Thursday, which prompted investors to start
pricing in hikes in official interest rates in 2010.
Romania sold 447 million euros worth of 4-year government
bonds, more than planned, on Friday. The first such sale since
2004, analysts said it may help relieve upward pressure on
yields in the domestic debt market.
"Friday's issue and the other hard currency funds ... will
help ease pressure on the local market," said Nicolaie
Alexandru-Chidesciuc, ING Bank Romania chief economist.
"But they cannot allow (leu) yields to fall sharply, because
the ministry's funding needs continue to be very high."
Equity markets also gave back gains, with Prague again the
only exception. The Budapest Stock Exchange <> fell 2.4 pct
on the back of poor results and a five percent fall for OTP Bank
<OTPB.BU> [] -- one of the region's biggest lenders.
LOOKING AHEAD
Almost all of the region's economies have slipped into
recession on the back of collapsing demand in the euro zone and
the Czech data still showed the economy contracted by a record
4.9 percent year-on-year in the second quarter.
Poland will publish industrial production and wage data next
week; the latter could be indicative of the overall economy,
which has weathered the financial crisis better than its
regional peers largely because of strong domestic consumption.
In Hungary, a sharp fall in GDP in the second quarter as
well as a mild inflation outlook has prompted talk of further
aggressive rate cuts to follow a surprisingly sharp 100-basis
point easing at the end of July.
But the bank has also placed emphasis on financial stability
-- understood by markets as short-hand for the forint, which has
eased 1.8 percent since the July cut, after strengthening
steadily in the weeks before it.
"(The central bank's) dovish stance is certainly confirmed
in hard data," Danske Bank said in a note. "Q2 GDP numbers (...)
showed depressing performance and July inflation numbers backed
up that inflationary pressures are non-existent."
Any regional recovery will be slow, analysts said, because
rising unemployment will hit domestic consumption, while this
year's slump in tax revenue will have to be addressed by
tighter, growth-limiting fiscal policies.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.769 25.771 +0.01% +3.82%
Polish zloty <EURPLN=> 4.142 4.129 -0.31% -0.65%
Hungarian forint <EURHUF=> 271.35 269.53 -0.67% -2.87%
Croatian kuna <EURHRK=> 7.31 7.318 +0.11% +0.75%
Romanian leu <EURRON=> 4.211 4.207 -0.09% -4.67%
Serbian dinar <EURRSD=> 93.01 93.337 +0.35% -3.8%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +14 basis points to 68bps over bmk*
4-yr T-bond CZ4YT=RR +1 basis points to +133bps over bmk*
8-yr T-bond CZ8YT=RR +16 basis points to +262bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +1 basis points to +365bps over bmk*
5-yr T-bond PL5YT=RR +6 basis points to +311bps over bmk*
10-yr T-bond PL10YT=RR +6 basis points to +281bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -18 basis points to +681bps over bmk*
5-yr T-bond HU5YT=RR -52 basis points to +613bps over bmk*
10-yr T-bond HU10YT=RR -40 basis points to +532bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1613 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaux, writing by Marius Zaharia and
Marton Dunai; Editing by Patrick Graham)
