* Zloty rallies, US data gave impulse for further gains
* Leu eases from 2-mo high before 2nd election round
(Adds quotes, fresher prices)
By Marius Zaharia and Dagmara Leszkowicz
BUCHAREST/WARSAW, Dec 4 (Reuters) - The Polish zloty jumped
on Friday to its highest levels since January after strong U.S.
jobs data prompted higher risk appetite and capped a week of
better economic data for emerging Europe.
Central Europe has been slow to recover from its sharp
economic downturn, while Poland is the only to avoid recession
this year and posted stronger-than-expected third quarter growth
earlier this week.
Data on Friday showed U.S. employers cut far fewer jobs than
expected last month, adding to a more-promising view of recovery
in the global economy that aids central Europe's export-reliant
economies.
At 1501 GMT the zloty <EURPLN=> was 1.4 percent stronger,
traded at 4.04 to the euro.
Hungary's forint <EURHUF=> and the Czech crown <EURCZK=>
were also stronger, rising 0.7 percent and 0.5 percent
respectively to the common currency.
"We're testing more highs (on the zloty), there's an
optimism on the market, and better than expected US data was
only an impulse for further strengthening," said Marcin Bilbin,
dealer at Pekao bank in Warsaw.
"The whole region benefitted as well, but the zloty is
shining in particular and it should strengthen further on."
Strategists have been most bullish on the Polish currency
versus peers, with a Reuters poll on Friday showing the unit
will lead gains in the region next year. []
LEU PUZZLE
In Romania, the leu <EURRON=> eased 0.3 percent to the euro
from a 2-month high hit this week ahead of the second round of a
presidential election due Dec. 6 that could spell the end of a
months-long political impasse.
Romania's leftist leader Mircea Geoana holds a wide lead in
opinion polls and he is expected to unseat President Traian
Basescu and appoint a government of his own ex-communist party
and their Liberal allies before Christmas. []
But analysts say uncertainty over whether the new government
will tighten the fiscal belt will limit gains for the leu.
[]
The leu has gradually gained some 1.5 percent this week,
with dealers suspecting covert central bank interventions to
reduce leu liquidity after the finance ministry sold
euro-denominated paper worth 1.4 billion euros on the domestic
market last week [].
The unit has been trading in a narrow range around 4.2-4.3
per euro for most of this year, with dealers saying frequent
central bank covert interventions have offset political and
fiscal woes. The bank has repeatedly declined any comment.
"The market action clearly suggests that investors are
positioned for a positive outcome, i.e. quick government
formation and the distribution of the next IMF tranche,"
UniCredit said in a note.
However, markets still worry over Geoana's reluctance to
back painful spending cuts needed to unblock a deal with the
International Monetary Fund, meaning a potential post-election
relief rally will not push the leu far beyond 4.2 per euro.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.655 25.776 +0.47% +4.28%
Polish zloty <EURPLN=> 4.043 4.098 +1.36% +1.78%
Hungarian forint <EURHUF=> 268.02 270.01 +0.74% -1.67%
Croatian kuna <EURHRK=> 7.304 7.311 +0.1% +0.84%
Romanian leu <EURRON=> 4.216 4.205 -0.26% -4.78%
Serbian dinar <EURRSD=> 96.47 95.93 -0.56% -7.25%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +11 basis points to 112bps over bmk*
7-yr T-bond CZ7YT=RR +2 basis points to +106bps over bmk*
10-yr T-bond CZ10YT=RR -5 basis points to +79bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -5 basis points to +354bps over bmk*
5-yr T-bond PL5YT=RR -7 basis points to +329bps over bmk*
10-yr T-bond PL10YT=RR -6 basis points to +292bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -5 basis points to +526bps over bmk*
5-yr T-bond HU5YT=RR -7 basis points to +481bps over bmk*
10-yr T-bond HU10YT=RR -5 basis points to +421bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1501 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Marius Zaharia and
Dagmara Leszkowicz; editing by Toby Chopra and Andy Bruce)
((marius.zaharia@reuters.com ; +40 21 315 8320; Reuters
Messaging: marius.zaharia.reuters.com@reuters.net ))
