* Forint, crown shrug off GDP data
* Currencies stronger on rising euro
* Zloty trims previous losses, should accelerate further
(Adds fixed income, detail)
WARSAW, Dec 9 (Reuters) - Emerging Europe's currencies and
stocks were mostly higher on Thursday, lifted by gains for the
euro against the dollar as markets shrugged off final GDP
readings that were broadly in line with preliminary forecasts.
The Czech economy expanded by 1.0 percent on a quarterly
basis in the third quarter, a touch below the preliminary
estimate, while Hungary's year-on-year growth stood at 1.7
percent in the same period, a touch above the flash estimate.
[] []
"The higher (Hungarian) GDP reading is not too surprising as
better than expected retail sales data already foreshadowed a
slight pickup in domestic consumption," said Gergely Suppan,
analyst at Takarekbank. "The growth is marginal and it's
vulnerable, but it's there and it is likely to continue."
The euro -- the region's main reference currency -- jumped
0.6 percent against the greenback as market sentiment improved
globally on hopes that a deal in Washington to extend tax cuts
will give a near-term boost to U.S. economic growth.
Stocks across the region were in the black, with Prague's PX
exchange <> leading gains, rising some 0.9 percent.
By 0929 GMT the forint <EURHUF=> was some 0.3 percent
stronger against the common currency, while the Czech crown
<EURCZK=> inched 0.1 percent lower. Romania's leu <EURRON=> was
little changed.
Bond yields in Hungary -- a centre of concern in the region
for investors worried by its budget policy -- fell 3-5 basis
points across the curve. But dealers said trade was thin and the
market was already heading for a pre-Christmas lull.
12-MONTH GAINS
In Hungary, one of the most dovish members of the central
bank (NBH) Tamas Banfi told the daily Magyar Nemzet that a
further increase in the bank's base rate cannot be ruled out.
[]
The NBH raised interest rates to 5.5 percent last month as
the recent tax changes pushed the inflation path above the
bank's medium-term target.
The Polish zloty <EURPLN=> recouped most of Wednesday's
sharp losses and was hovering at around 4.03 against the euro in
early trade. Polish bonds were stable, with yields almost flat
compared to the previous close.
The Polish currency has hit multi-month lows of almost 4.11
this month as worries over the euro zone debt crisis dominate
sentiment and concerns over Hungary weigh on the region.
Reuters polling, however, shows analysts expect the Polish
currency to appreciate over the course of the next year. Goldman
Sachs said in a note it had revised its forecast, saying it
expected a rise to 3.82 in the next 12 months due to the
country's solid fundamentals, privatisation inflows and
prospective interest rate increases.
"The current weakness reflects uncertainty over the
euro zone's fiscal woes; as these are addressed the zloty should
strengthen and return to a long-term appreciation trend," the
bank said.
A member of the Polish central bank's Monetary Policy
Council, Andrzej Bratkowski, told news agency Bloomberg that the
MPC should raise interest rates in the next three months --
broadly a repeat of his earlier calls. []
The key Polish rate has stood at a record low of 3.5 percent
for the past 17 months, however, and it is still unclear if the
additional votes on the council needed for a rate rise can be
found.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.061 25.033 -0.11% +5.02%
Polish zloty <EURPLN=> 4.025 4.038 +0.32% +1.96%
Hungarian forint <EURHUF=> 276.97 277.73 +0.27% -2.39%
Croatian kuna <EURHRK=> 7.383 7.383 0% -1%
Romanian leu <EURRON=> 4.297 4.297 0% -1.39%
Serbian dinar <EURRSD=> 107.14 107.3 +0.15% -10.51%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -1 basis points to 87bps over bmk*
7-yr T-bond CZ7YT=RR +1 basis points to +82bps over bmk*
10-yr T-bond CZ9YT=RR +4 basis points to +92bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR 0 basis points to +355bps over bmk*
5-yr T-bond PL5YT=RR -1 basis points to +337bps over bmk*
10-yr T-bond PL10YT=RR +4 basis points to +298bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -6 basis points to +645bps over bmk*
5-yr T-bond HU5YT=RR -3 basis points to +581bps over bmk*
10-yr T-bond HU10YT=RR +2 basis points to +490bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1029 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, Writing by Dagmara
Leszkowicz; Editing by Patrick Graham)
