* Stocks, bonds, currencies ease slightly as investors pause
* Goldman fraud case, Greece keep core mkts on edge
* Effects on CEE assets unclear for now, seen temporary
(Adds bonds, updates markets)
BUDAPEST, April 19 (Reuters) - Central European assets
weakened on Monday as Greece's debt crisis and U.S. fraud
charges against Goldman Sachs kept investors on edge and
diminished risk appetites.
As stocks, bonds and currencies eased across the region,
dealers said worsened global sentiment would likely weigh for
the rest of the day, though further losses should be limited.
Poland's zloty <EURPLN=> led losses, shedding 0.4 percent
against the euro by 0953 GMT, followed by the Czech crown
<EURCZK=> and the Romanian leu <EURRON=>, which slid 0.2 percent
apiece. Hungary's forint <EURHUF=> dipped 0.1 percent.
Stocks in Budapest were down 2.2 percent, while the Warsaw
bourse lost 2.1 percent and Czech stocks were 1 percent lower.
"It's Greece, Goldman, stocks and volcanic ash altogether
that is worsening sentiment," said one Warsaw-based dealer.
He said a threat of currency intervention, though lower now,
was still weighing on the zloty.
"CEE currencies have taken a hit this morning ... We are
likely to see some profit-taking in the coming sessions should
negative news continue to build," UniCredit said in a note.
The forint, which rose close to 16-month highs last week, is
still seen supported by market optimism that a strong government
after a second round of elections on April 25 would carry out
the reforms needed to set the economy on a path towards growth.
The centre-right Fidesz party has a strong chance of winning
two-thirds of the seats in Hungary's next parliament.
"The strong political support (behind Fidesz) is keeping the
forint strong, which will probably last until they come out with
their budget plans," a Budapest-based dealer said.
Fidesz has campaigned on tax cuts and measures to boost the
economy which some analysts said could be difficult to reconcile
with a need to keep fiscal policy tight in Hungary.
The Czech crown <EURCZK=> was nearly 1 percent off a 7-month
high it hit last week, testing the 25 per euro resistance level.
Analysts said with evidence of better foreign demand in the
economy, the crown could again test fresh highs.
"In light of Friday's correction not being so significant, a
chance still exists to test the 25 level," Komercni Banka said
in a note, adding 24.95 would be the next technical level.
The Czech crown dipped last week after central bank Governor
Zdenek Tuma said he was leaving his post early to pre-empt
lengthy speculation about his successor. []
BOND PRICES EASE
Bond yields rose across the region as investors were taking
stock, but yields remained near multi-year lows and the effect
of the Goldman story, or Greece, were unclear.
"Bond prices are still relatively high, so a risk of further
correction still exists, especially that we're having bond
auction next Wednesday," said Remigiusz Zalewski, dealer at BRE
bank in Warsaw.
Poland will offer 5-year bonds at a tender on Wednesday.
Czech bond yields rose from the multi-year lows of last
week. The 10-year yield was up about 2 basis points on Monday.
Hungarian debt also gave up some ground, although a Budapest
-based dealer said the losses should be limited.
Local factors remain predictable, he said, as the central
bank is widely seen easing 25 basis points on April 26, a day
after the elections, where opposition Fidesz is expected to be a
two-thirds winner.
"There are interesting developments globally, with Greek
assets weakening back to where they were before the aid package
was announced," the dealer said. "Overall, though, we do not
reckon with a lasting negative impact from that."
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.197 25.144 -0.21% +4.45%
Polish zloty <EURPLN=> 3.902 3.886 -0.41% +5.18%
Hungarian forint <EURHUF=> 264.68 264.48 -0.08% +2.14%
Croatian kuna <EURHRK=> 7.255 7.258 +0.04% +0.75%
Romanian leu <EURRON=> 4.158 4.15 -0.19% +1.91%
Serbian dinar <EURRSD=> 98.71 99.02 +0.31% -2.87%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +3 basis points to +63bps over bmk*
7-yr T-bond CZ7YT=RR +4 basis points to +64bps over bmk*
10-yr T-bond CZ10YT=RR +3 basis points to +56bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +1 basis points to +353bps over bmk*
5-yr T-bond PL5YT=RR +1 basis points to +298bps over bmk*
10-yr T-bond PL10YT=RR +1 basis points to +247bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +2 basis points to +436bps over bmk*
5-yr T-bond HU5YT=RR +1 basis points to +361bps over bmk*
10-yr T-bond HU10YT=RR +1 basis points to +340bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1153 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reutrs bureax, writing by Marton Dunai; editing
by Tony Austin)
