* Hungarian forint, Polish zloty off highs
* All eyes on inflation outlook, Trichet statement
* Impact from Portugal bailout seen limited
(Recasts, adds debt tenders/yields)
By Radu Marinas
BUCHAREST, April 7 (Reuters) - Central European currencies
eased on Thursday as the region's markets stayed focused on a
European Central Bank policy meeting that is expected to raise
interest rates later in the day.
The ECB is expected to raise rates for the first time since
July 2008 with more hikes in the pipeline, but fearful of
heaping more pain on euro zone's stragglers, it may give few
clues about when the next move will come. []
Any clues ECB President Jean-Claude Trichet gives "about
further tightening could be positive for central and eastern
European currencies including the Romanian leu," said Nicolaie
Alexandru-Chidesciuc of ING Bank in Bucharest.
ECB policymakers have been out in force in recent weeks
flagging a hike, and all but four of 80 economists polled by
Reuters expected the bank to enforce a 25 basis points hike.
There were no immediate signs of market impact from
Portugal's move late on Wednesday to seek financial aid.
Investors have thought for months that a bailout was
inevitable so an announcement by Portuguese caretaker Prime
Minister Jose Socrates is unlikely to hurt markets.
[]
"There's nothing significant (in terms of an impact)." said
Aurelija Augulyte of Nordea. "The bailout was expected. Now
everyone is focusing on the ECB."
By 1010 GMT, the Hungarian forint <EURHUF=> shed 0.4
percent, retreating from 11-month highs earlier in the week on
optimism about Budapest's planned fiscal reforms.
The Czech crown <EURCZK=> was 0.1 percent down while the
Polish zloty <EURPLN=> was flat.
The Romanian leu <EURRON=> was marginally down on the day
after comments by central bank Governor mugur Isarescu that
current interest rates are at an adequate level and are not
hurting the country's economic recovery. []
Regional bourses edged down in a tight 0.3-0.6 percent range
<><><> while Bucharest <.BET> was 0.5 percent up.
YIELDS STABLE
Government bonds were stable ahead of the ECB decision at
1145 GMT.
Hungary sold 45.00 billion forints ($245 million) worth of
government bonds at an auction on Thursday, the Government Debt
Management Agency said <HUAUCTION02>. []
Industrial output data <HUIND=ECI> released earlier did not
impact the forint. Output rose by a higher than expected annual
14.3 percent in February after a 13.4 percent rise in January,
the Central Statistics Office (KSH) said on Thursday.
The February figure, based on preliminary unadjusted data,
was well above analysts' median forecast of 11.7 percent in a
Reuters poll <HUIND1>. []
Hungary will publish March public sector balance figures at
1500 GMT <HUDEF=ECI>.
Elswhere in the region, the Czech crown was seen remaining
resilient after central banker Kamil Janacek said he saw enough
factors for a rise from record low interest rates at a meeting
in May. []
His comments followed fellow ratesetter Pavel Rezabek, who
said rates could rise in May if upside CPI risks materialise.
"Considering both comments, we still do not believe that a
rate hike is imminent," Danske Bank said in a morning note.
Twelve of 19 analysts in a Reuters poll predicted the first
Czech hike would come by June.
Yields edged up modestly to 1.26 percent at an auction of
39-week Czech treasury bills <CZ20601616=> compared to a similar
sale on Nov. 18.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2011
Czech crown <EURCZK=> 24.427 24.396 -0.13% +2.35%
Polish zloty <EURPLN=> 3.973 3.972 -0.03% -0.38%
Hungarian forint <EURHUF=> 264.3 263.2 -0.42% +5.18%
Croatian kuna <EURHRK=> 7.369 7.368 -0.01% +0.15%
Romanian leu <EURRON=> 4.107 4.105 -0.05% +3.07%
Serbian dinar <EURRSD=> 102.03 101.82 -0.21% +3.82%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +1 basis points to -9bps over bmk*
7-yr T-bond CZ7YT=RR -1 basis points to +48bps over bmk*
10-yr T-bond CZ9YT=RR -4 basis points to +60bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +5 basis points to +318bps over bmk*
5-yr T-bond PL5YT=RR 0 basis points to +297bps over bmk*
10-yr T-bond PL10YT=RR -1 basis points to +269bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -1 basis points to +435bps over bmk*
5-yr T-bond HU5YT=RR 0 basis points to +399bps over bmk*
10-yr T-bond HU10YT=RR -1 basis points to +354bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1319 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus; Writing by Radu Marinas;
Editing by Patrick Graham)
