(Adds details, fixed income)
PRAGUE, Sept 24 (Reuters) - The zloty slipped against the
euro on Wednesday before a Polish central bank policy decision
later in the day, while jitters in global markets weighed on
central European currencies.
The zloty <EURPLN=> eased to 3.304 to the euro by 0814 GMT,
from Tuesday's domestic close of 3.296.
The Czech crown <EURCZK=> suffered the biggest losses in the
region, falling 0.6 percent to 24.19 against the euro. Hungary's
forint <EURHUF=> was steady at 240.5 per euro, staying in tight
ranges.
Financial markets remained nervous as a $700 billion U.S.
bailout plan moved through Congress, with uncertainty growing
about how effectively the plan would address financial turmoil.
"We still see risk aversion in markets and liquidity
issues," said a Warsaw trader.
The trader said speculation of a possible Polish rate hike
today might lend slight support to the zloty, but the consensus
view was rates would be left unchanged at 6 percent this month
and raised next month.
Polish bonds were stable on Wednesday morning with attention
focused on comments the central bank will issue later that will
offer more clues to the rate outlook, which has been clouded by
weak industrial output and retail sales data released this
month.
"The market is pricing in one hike, but is more and more
divided over further moves as the recent data were rather
'dovish' than 'hawkish'," a fixed-income trader said.
The Czech bank, which meets on rates on Thursday, in August
became the first in the region to ease monetary policy in this
rate cycle, cutting rates by 25 basis points to 3.50 percent. It
is seen easing further to support a slowing economy.
In other trade, the Romanian leu <EURRON=> dipped to 3.665
versus the euro from 3.662, Serbia's dinar <EURRSD=> lost 0.1
percent to 76.35 and Croatia's kuna <EURHRK=> was even at 7.119
per euro.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2008
Czech crown <EURCZK=> 24.194 24.046 -0.62% +8.69%
Polish zloty <EURPLN=> 3.304 3.296 -0.24% +8.23%
Hungarian forint <EURHUF=> 240.500 240.590 +0.04% +4.88%
Croatian kuna <EURHRK=> 7.119 7.119 0% +2.83%
Romanian leu <EURRON=> 3.663 3.662 -0.03% -2.31%
Serbian dinar <EURRSD=> 76.353 76.248 -0.14% +3.06%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -2 basis points to 14bps over bmk*
5-yr T-bond CZ5YT=RR -5 basis points to -4bps over bmk*
10-yr T-bond CZ9YT=RR -4 basis points to +28bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +9 basis points to +251bps over bmk*
5-yr T-bond PL5YT=RR +4 basis points to +198bps over bmk*
10-yr T-bond PL10YT=RR +5 basis points to +164bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -3 basis points to +529bps over bmk*
5-yr T-bond HU5YT=RR +4 basis points to +483bps over bmk*
10-yr T-bond HU10YT=RR +5 basis points to +360bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1014 CET.
Currency percent change calculated from the daily domestic
close at 1500 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet, editing
by Mike Peacock)
