* FX draws support from stronger euro
* IMF's Belka proposed as next Polish c.bank governor
* Czech crown underperforms, markets eye election on Fri-Sat
(Adds Polish c.bank head candidate, detail)
By Dagmara Leszkowicz
WARSAW, May 27 (Reuters) - The zloty led gains in emerging
Europe on Thursday on the back of a rebound in the euro and
positive reaction after Poland's acting president named a senior
IMF official as his candidate to head the central bank.
The euro -- the region's main reference currency -- surged
after comments from a Chinese official calmed some concerns that
Beijing may be distancing itself from euro zone debt holdings.
[]
The zloty <EURPLN=> gained for a second straight session,
recovering some of the almost 7 percent it had lost against the
euro since the beginning of May on worries over the euro zone
fiscal crisis.
It was helped by news that Poland's acting president
Bronislaw Komorowski had proposed senior IMF official Marek
Belka to head the central bank, a move that markets saw as
positive. []
The previous governor, Slawomir Skrzypek, died in a plane
crash in Russia on April 10 along with Polish President Lech
Kaczynski and scores of other senior officials.
Skrzypek's deputy, Piotr Wiesiolek, has temporarily taken
over the day-to-day running of the central bank and been
empowered to chair sessions of the rate-setting Monetary Policy
Council (MPC) and vote with the council.
"In short, good news especially given the times of financial
market stress," Mateusz Szczurek, chief economist at ING Bank
Slaski, wrote in reaction to the proposal to appoint Belka to
head the bank.
* For more stories on the nomination, double click on
[] []
In other trade, the Czech crown <EURCZK=> slipped 0.2
percent against the euro by 1013 GMT. Other currencies rose,
with Hungary's forint <EURHUF=> 0.2 percent stronger and the
Romanian leu <EURRON=> adding 0.4 percent against the common
currency.
Recent comments by Polish officials about the zloty also
supported the currency, analysts said.
On Wednesday two Polish central bankers and a deputy finance
minister sought to quash rumours the country was moving towards
a managed float of its zloty currency, saying the currency
remained free-floating. []
In April the central bank intervened for the first time in a
decade to counter zloty strength, and in May traders said the
finance ministry sold euros on the market to boost the currency.
POLITICAL FACTORS
The Czech crown underperformed the region's currencies
because analysts believe the outcome of parliamentary polls this
weekend is uncertain and could lead to weeks or even months of
political wrangling.
The leu has also lagged as markets fear mass protests over
plans to cut wages and pensions could force the government to
back down on some of the measures, which are crucial to secure
IMF-led aid.
Romania's Prime Minister Emil Boc said on Wednesday his
government would approve a letter of intent to the International
Monetary Fund, containing drastic wage and pension cuts which
triggered the widespread social unrest. []
Trade unions plan a general strike next month.
In Hungary, another country with IMF aid, data showed the
three-month rolling unemployment rate rose to 11.8 percent, its
highest rate since the first quarter of 1993. []
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25,565 25,518 -0,18% +2,95%
Polish zloty <EURPLN=> 4,078 4,105 +0,66% +0,64%
Hungarian forint <EURHUF=> 276,68 277,3 +0,22% -2,29%
Croatian kuna <EURHRK=> 7,259 7,27 +0,15% +0,69%
Romanian leu <EURRON=> 4,15 4,165 +0,36% +2,11%
Serbian dinar <EURRSD=> 102,66 102,91 +0,24% -6,6%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +N79 basis points to 135bps over bmk*
7-yr T-bond CZ7YT=RR +4 basis points to +154bps over bmk*
10-yr T-bond CZ9YT=RR -3 basis points to +140bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -3 basis points to +409bps over bmk*
5-yr T-bond PL5YT=RR -4 basis points to +380bps over bmk*
10-yr T-bond PL10YT=RR -6 basis points to +319bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -17 basis points to +563bps over bmk*
5-yr T-bond HU5YT=RR -32 basis points to +517bps over bmk*
10-yr T-bond HU10YT=RR -53 basis points to +467bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1213 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 Toby Chopra/Susan Fenton)
