* Zloty touch lower, bourse up after top officials killed
* Questions surround Polish c.bank intervention
* Forint up, bond yields at lows after Fidesz election win
(Adds bonds, other FX)
By Jason Hovet
PRAGUE, April 12 (Reuters) - Polish markets held their own
on Monday, showing resilience in the first trading session since
the weekend plane crash that killed the country's president,
central bank governor and other senior officials.
In Hungary, the forint rose and bond yields hit their lowest
levels in more than three years after Sunday's first round of
elections brought a sweeping victory for the centre-right Fidesz
party. []
The party, tasked with reviving the economy and creating
jobs, neared the two-thirds parliamentary majority it needs to
push through vital reforms for the IMF-funded country.
The weekend events turned more focus on emerging Europe,
where investors have pushed assets to multi-month highs amid
better growth prospects than in the debt-laden euro zone
periphery.
Warsaw's stock index <> opened 0.2 percent lower on
Monday before rebounding to trade higher in tandem with other
bourses in the region, and hovered near 19-month highs.
Markets got a lift from euro zone finance ministers'
approval of a 30 billion euro ($40 billion) emergency aid
mechanism for debt-plagued Greece, calming investors and sending
the euro -- central Europe's main reference currency -- to a
one-month high versus the dollar. []
But the zloty <EURPLN=> and other central European
currencies failed to track the euro higher.
The zloty inched 0.1 percent up against the euro to bid at
3.872 by 0731 GMT, after hitting a two-week low earlier
following the central bank's first intervention in 10 years on
Friday to knock the unit of 16-month highs.
Bond markets stayed quiet, with yields little moved.
Analysts expect Poland's financial markets to remain stable
after a government plane crashed in heavy fog short of the
runway near Smolensk, Russia on Saturday, killing President Lech
Kaczynski, central bank governor Slawomir Skrzypek, other
leading politicians and military officials. []
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* For more stories on the Polish crash and its aftermath
please double click on []
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"We do not expect further weakening of the zloty, but rather
its underperformance in comparison with the region and an
inability to benefit from Greek bailout details," KBC analysts
said in a mid-morning trading note.
The zloty is seen leading the region's currencies this year
and the unit's 6 percent rise since the start of the year has
outpaced a 4.5 percent rise in the Czech crown and 2-3 percent
gains for the forint and Romanian leu.
Skrzypek was seen as the driving force behind last Friday's
intervention. Analysts say central bank policy should stay
unchanged, at least until a new bank chief is chosen in the
coming weeks. []
"Its stance became clear on Friday, when the Bank intervened
on the FX market to counteract the persistent strength of the
zloty," Commerzbank said. "We do not expect a struggle between
speculators and the NBP."
FIDESZ GETS STRONG MANDATE
Hungary's forint rose 0.6 percent to 265.1 to the euro and
stocks <> rose 1 percent to their highest since the start of
2008 after the Fidesz victory, which had been expected.
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* For a Take A Look on the Hungarian election please double
click on []
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Bonds also firmed but mainly on the Greek news, dealers
said. Yields fell more than 20 basis points to multi-year lows
and the 5-year yield dropping below 6 percent for the first time
since 2005.
Dealers said lower supply and a strong election outcome was
also positive for the debt market. []
"The election result is in line with expectations, though
it's true, in the eyes of foreigners it's positive that Fidesz
still has chance for getting two thirds," a bond dealer said.
Investors will watch the second round of elections on April
25, along with Fidesz's next moves to get Hungary, among the
worst hit in the economic downturn and a recipient of IMF aid,
back to economic growth. Job creation has been the party's main
pledge. []
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.209 25.191 -0.07% +4.4%
Polish zloty <EURPLN=> 3.865 3.868 +0.08% +6.18%
Hungarian forint <EURHUF=> 265.13 266.58 +0.55% +1.97%
Croatian kuna <EURHRK=> 7.27 7.262 -0.11% +0.54%
Romanian leu <EURRON=> 4.127 4.13 +0.07% +2.68%
Serbian dinar <EURRSD=> 99.64 99.62 -0.02% -3.77%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR 0 basis points to 66bps over bmk*
7-yr T-bond CZ7YT=RR -4 basis points to +76bps over bmk*
10-yr T-bond CZ10YT=RR -3 basis points to +72bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -3 basis points to +346bps over bmk*
5-yr T-bond PL5YT=RR -3 basis points to +292bps over bmk*
10-yr T-bond PL10YT=RR -3 basis points to +230bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -29 basis points to +432bps over bmk*
5-yr T-bond HU5YT=RR -30 basis points to +368bps over bmk*
10-yr T-bond HU10YT=RR -24 basis points to +340bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1123 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
For related news and prices, click on the codes in brackets: All
emerging market news []
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(Reporting by Reuters bureaus, writing by Jason Hovet; Editing
by John Stonestreet and Toby Chopra)
