* Zloty, forint, crown hover near peaks; more gains seen
* Leu steady as inflation points to rate cuts
* Poles tender 2-yr bonds after Swiss issue
(Adds bonds, updates prices)
By Jason Hovet
PRAGUE, March 10 (Reuters) - The Hungarian forint and Polish
zloty retreated from multi-month peaks on Wednesday, while
Romania's leu held steady after inflation data pointed to
further interest rate cuts.
Central Europe's currencies have rallied in the past month,
but have been hit by some profit-taking this week. Dealers said
the region's improved economic outlook left room for more gains.
Data on Wednesday showed inflation in Romania, where
interest rate cuts remain on the agenda, fell below market
expectations in February. []
Commerzbank said it expected a 50 basis point cut at the
central bank's meeting later this month.
"The leu is unlikely to be affected by this as the improved
political situation and the ... IMF aid are still dominating,"
it said in a daily note.
The leu <EURRON=> bid down a touch at 4.095 to the euro by
1010 GMT.
The International Monetary Fund freed up in February $3.32
billion from Romania's revived 20 billion euro aid package after
a new government passed a 2010 austerity budget, which has also
led to improved outlooks from ratings agencies. []
In Hungary, where analysts said there was room to ease
monetary policy, markets were looking to Thursday's release of
February inflation data after an upside surprise in January.
"With the EUR/HUF below 270, everyone is trying to guess
whether the central bank would cut one more time, or maybe
more," a dealer said. "But with two consecutive high inflation
numbers, the (Hungarian central bank) would probably strike a
less bullish tone."
The forint <EURHUF=> dipped 0.2 percent to 267.08 to the
euro, but traded near its highest since November. The Czech
crown <EURCZK=> was steady just off four-month highs.
BOND DEMAND
The zloty <EURPLN=> pulled back slightly from a 15-month
peak to bid at 3.873 per euro. The unit is expected to lead
central European currencies this year on the back of Poland's
economic recovery and expectations of rate hikes.
However, the pace of the zloty's rise this year -- it has
gained 6 percent -- has raised concern among some policymakers
that the recovery could be stunted, with rate setter Andrzej
Bratkowski saying on Tuesday that rates would most probably stay
unchanged this year. []
Polish domestic bond markets were looking to a 2-year bond
tender at midday.
The country priced a 4-year Swiss franc bond worth 475
million francs at 88 basis points above mid-swaps on Tuesday.
The issue met with strong demand as investors continue to seek
out emerging market sovereign debt. []
Romania was also on a roadshow for its planned Eurobond
issue which ends on March 11.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.643 25.632 -0.04% +2.63%
Polish zloty <EURPLN=> 3.873 3.867 -0.15% +5.96%
Hungarian forint <EURHUF=> 267.08 266.53 -0.21% +1.22%
Croatian kuna <EURHRK=> 7.262 7.262 0% +0.65%
Romanian leu <EURRON=> 4.095 4.094 -0.02% +3.48%
Serbian dinar <EURRSD=> 99.738 99.657 -0.08% -3.87%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +3 basis points to 86bps over bmk*
7-yr T-bond CZ7YT=RR +2 basis points to +120bps over bmk*
10-yr T-bond CZ10YT=RR +4 basis points to +96bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1110 CET.
Currency percent change calculated from the daily domestic
close at 1700 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 Stephen Nisbet, John Stonestreet)
