* Crown bounces off 2-week low, rate cuts still eyed
* Intervention fears hang on zloty
* Stocks up on higher risk appetite, econ outlook
(Adds bonds, updates with ZEW)
By Jason Hovet
PRAGUE, April 20 (Reuters) - Central European currencies
edged up on Tuesday, regaining some lost ground with a rise in
stock markets after German data pointed to a better economic
outlook for the region and higher risk appetite.
Analyst and investor sentiment in Germany, central Europe's
main trade partner, surged in April, gaining for the first time
since September and brightening the region's outlook.
[]
"Significantly better German ZEW survey at 53.0 is an
encouraging signal and should offer the region support, with
EUR/USD up following the release and global sentiment improving
gradually," 4Cast analyst Piotr Matys said.
Bourses rose, with Budapest's <> nearly 2 percent gain
making it a clear outperformer, and tracked global peers higher
after Citigroup <C.N> posted its best results in three years.
[]
Currencies were up after losing on Monday. The Czech crown
<EURCZK=> and Polish zloty <EURPLN=> gained around 0.2 percent
from Monday's domestic close by 0734 GMT, while the Hungarian
forint <EURHUF=> and Romanian leu <EURRON=> added 0.1 percent.
Dealers said, though, that investors remained cautious on
riskier assets, especially given persistent worries about
debt-ridden Greece and its stand-by aid package. []
[]
A Greek T-bill auction, the third debt sale since the
European/IMF safety net for Greece was agreed, was covered but
the yield rose.
HUNGARIAN RATE CUT EYED
Central European bonds rebounded slightly on Tuesday.
Hungarian bonds have been among the best performers this
year thanks to easing monetary policy. The central bank will
hold its next rate-setting meeting on Monday and is widely
expected to cut its 5.5 percent base rate further.
The meeting will come a day after the second round of
elections, which is expected to give the centre-right Fidesz
party a parliamentary majority and provide another boost to
markets.
Currencies, bonds and stocks in central Europe have all
mostly jumped to their strongest levels in months this year.
Czech bonds were mixed, but mostly higher on Tuesday. A
rally since the middle of March has shaved around 50 basis
points off the 10-year bond <CZ10YT=RR> yield to 3.639 percent.
The crown bounced, after falling to a two-week low hit in
the previous session when dovish comments from central bank
Vice-Governor Mojmir Hampl added to expectations that rate cuts
were not over. []
The zloty <EURPLN=> also firmed under the 3.90 per euro
level, but dealers said any gains would be tempered by the risk
of central bank intervention -- after the bank's first foray
into the market in 10 years this month. []
"We are not untouched by the intervention but see this more
as a signal from (National Bank of Poland) that the path of
appreciation has gone too fast rather than that the NBP is
targeting a change in trend," SEB analysts said in a note.
The zloty has led gains in the region's currencies this year
with a more than 6 percent rise at one point, and while
currencies have given up some gains, analysts expect further
appreciation this year on the back of rising exports.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.284 25.334 +0.2% +4.09%
Polish zloty <EURPLN=> 3.892 3.898 +0.15% +5.45%
Hungarian forint <EURHUF=> 265.12 265.27 +0.06% +1.97%
Croatian kuna <EURHRK=> 7.255 7.255 0% +0.75%
Romanian leu <EURRON=> 4.146 4.158 +0.29% +2.2%
Serbian dinar <EURRSD=> 99.41 98.72 -0.69% -3.55%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -2 basis points to 54bps over bmk*
7-yr T-bond CZ7YT=RR +4 basis points to +61bps over bmk*
10-yr T-bond CZ10YT=RR +2 basis points to +54bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -3 basis points to +354bps over bmk*
5-yr T-bond PL5YT=RR -3 basis points to +293bps over bmk*
10-yr T-bond PL10YT=RR -3 basis points to +243bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -10 basis points to +429bps over bmk*
5-yr T-bond HU5YT=RR -8 basis points to +366bps over bmk*
10-yr T-bond HU10YT=RR -4 basis points to +334bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1155 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet; Editing
by Susan Fenton)
