* FX mixed, China rate hike weighs on risk appetite
* Zloty may be supported by expected privatisation flows
* Leu pressured ahead of no-confidence vote due next week
(Adds fixed income, detail)
By Dagmara Leszkowicz
WARSAW, Oct 20 (Reuters) - Central European currencies were
little changed on Wednesday, holding at lower levels a day after
a surprise rate hike in China dented investor appetite for
riskier assets and pushed the euro down.
"CEE currencies (are) under some pressure as the dollar
stages a comeback. The zloty and the forint got hit the hardest
yesterday in a move that seems to have some legs," analysts at
SEB wrote in a morning note.
At 0903 GMT Hungary's forint <EURHUF=> was up some 0.3
percent versus the euro and the Czech crown <EURCZK=> was little
changed.
Stocks in the region were mostly in negative territory,
barring Budapest's BUX <> which gained some 0.4 percent,
lifted by Magyar Telekom <MTEL.BU> on news that the impact of a
new telecoms tax is likely to affect companies' results less
than previously expected. []
The Polish zloty <EURPLN=> hovered at a key resistance level
of 3.96 versus the euro. Dealers said gloomier global sentiment
may push it to around 4.00 but it should then bounce back.
"I expect the zloty to come back to its appreciation trend,
although in the short term it may weaken to 3.95-4.00 to the
euro," said one Warsaw-based dealer. "Privatisation inflows may
help to boost the currency."
On Tuesday, sources told Reuters Poland's Treasury Ministry
chose two companies -- France's GdF Suez <GSWZ.PA> and an
investment vehicle of Poland's richest man Jan Kulczyk -- for
final talks on the sale of a 51 percent stake in utility Enea
<ENAE.WA>, worth some $1.9 billion. []
Poland's ambitious privatisation plans for 2010 are forecast
to generate $8.1 billion, with more than half of that already
raised. This should prove supportive for the zloty as foreign
investors are expected to account for some of the buying.
POLITICS IN FOCUS
In Hungary, Prime Minister Viktor Orban told a private
broadcaster in an interview that his government will no longer
send payments to private pension funds at all. []
Last week, the centre-right government announced it would
suspend payments to the funds until the end of 2011 to help
Budapest to meet tough budget targets.
Pension firms say the move amounts to covert
re-nationalisation of a partially-privatised system that helps
underpin local stock and bond markets and has been seen as a
cornerstone of Hungary's transition from communism.
Hungary's ambitious budget plans helped government bond
yields to fall by about half a percentage point last month, but
since then the papers have shed some of the gains.
Romania's leu traded around a 3-month low against the euro
to which it slipped after news that the leftist opposition will
file a motion on a parliamentary vote of no-confidence against
the government's IMF-mandated austerity policies.
The vote is set for next Wednesday and is expected to be
rejected since the opposition is around 23 votes short of the
majority of 236 seats required to topple the government.
But opposition leader Victor Ponta could lure deputies
without party affiliation to reach the needed threshold, meaning
political tension is likely to persist for the time being.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 24.522 24.536 +0.06% +7.32%
Polish zloty <EURPLN=> 3.968 3.959 -0.23% +3.43%
Hungarian forint <EURHUF=> 276.55 277.45 +0.33% -2.24%
Croatian kuna <EURHRK=> 7.332 7.326 -0.08% -0.31%
Romanian leu <EURRON=> 4.309 4.298 -0.26% -1.66%
Serbian dinar <EURRSD=> 105.973 105.9 -0.07% -9.52%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -4 basis points to 84bps over bmk*
7-yr T-bond CZ7YT=RR -3 basis points to +78bps over bmk*
10-yr T-bond CZ9YT=RR 0 basis points to +99bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -3 basis points to +382bps over bmk*
5-yr T-bond PL5YT=RR -3 basis points to +364bps over bmk*
10-yr T-bond PL10YT=RR -2 basis points to +318bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -3 basis points to +551bps over bmk*
5-yr T-bond HU5YT=RR -3 basis points to +527bps over bmk*
10-yr T-bond HU10YT=RR -1 basis points to +464bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1103 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 []
Spot FX rates Eastern Europe spot FX <EEFX=>
Middle East spot FX <MEFX=> Asia spot FX <ASIAFX=>
Latin America spot FX <LATAMFX=>
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 Dagmara Leszkowicz;
editing by Patrick Graham, John Stonestreet)
