* CEE region's stocks, currencies dip
* Goldman fraud case, volcano ash dent risk appetite
* Czech c.banker's comments fuel rate cut speculation
*
(Updates throughout)
By Marton Dunai and Marius Zaharia
BUDAPEST/BUCHAREST, April 19 (Reuters) - The crown dipped
after dovish comments by a Czech central banker on Monday, and
other central European assets weakened as U.S. fraud charges
against Goldman Sachs depressed risk appetite.
Central bank Vice-Governor Mojmir Hampl said on Monday he
saw signs of downside risks to prices, and that the issue of
monetary easing remained open, adding to speculation that the
bank might still cut rates from record lows. []
Hampl did not predict how he might vote at the bank's next
policy meeting on May 6. He voted for unchanged rates at the
last meeting in March, in line with the board majority which
outweighed unexpected calls for a minor cut.
"People are starting to re-think decisions on going short
EUR/CZK. Linked with comments from the Czech central bank, there
is no particular reason for the crown to strengthen," a Prague
FX dealer said, also referring to pressures from upcoming
elections and uncertainty over who will form the next
government.
At 1343 GMT, the crown <EURCZK=> was 0.4 percent weaker on
the day while Hungary's forint <EURHUF=>, Romania's leu
<EURRON=> and Poland's zloty <EURPLN=> were a touch lower.
Stocks were also down across the region, with the Polish
blue chip index <> leading losses with a 2.7 percent dip,
leaving it on track for its biggest daily fall in seven weeks.
Dealers said worsening global sentiment due to the charges
against Goldman Sachs, lingering worries over Greece's debt and
uncertainty about the impact of the Icelandic volcanic ash cloud
on tourism and the travel sector were behind the losses.
"It's Greece, Goldman, stocks and volcanic ash altogether,"
said one Warsaw-based dealer.
He said a threat of currency intervention, though lower now,
was still weighing on the zloty, which was little changed by
better-than-expected wage data on Monday. [].
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. []
FORINT REMAINS SUPPORTED
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
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.
Bond yields rose across the region but remained near
multi-year lows. Some Czech bonds pared losses after Hampl's
comments, although trading remained mixed.
"If Hampl is pointing in the direction of a cut, it is a big
surprise because he seemed to be more against it before," said a
Prague bond dealer. "A (cut) seems to be quite a bit priced in."
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.236 25.144 -0.36% +4.29%
Polish zloty <EURPLN=> 3.896 3.887 -0.23% +5.34%
Hungarian forint <EURHUF=> 264.64 264.48 -0.06% +2.16%
Croatian kuna <EURHRK=> 7.255 7.255 0% +0.75%
Romanian leu <EURRON=> 4.153 4.15 -0.07% +2.03%
Serbian dinar <EURRSD=> 99.45 99.02 -0.43% -3.59%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -10 basis points to 51bps over bmk*
7-yr T-bond CZ7YT=RR -2 basis points to +58bps over bmk*
10-yr T-bond CZ10YT=RR 0 basis points to +53bps 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 +14 basis points to +438bps over bmk*
5-yr T-bond HU5YT=RR +13 basis points to +373bps over bmk*
10-yr T-bond HU10YT=RR +15 basis points to +341bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1543 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 and
Marius Zaharia; editing by John Stonestreet)
