CEE MARKETS 4-FX loses after swings, Hungary debt well-bid

                                
 * Profit-taking, Latvia worries, Polish wage data hurt
                                
 * Negative open in U.S. markets further hurts prices
                                
 * Hungary debt auctions successful, to issue eurobond
                                
 
 (Updates with late FX falls, Hungary eurobond details)
                                
 By Dagmara Leszkowicz and Marius Zaharia
                                
 WARSAW/BUCHAREST, July 16 (Reuters) - Central European
currencies traded down late on Thursday after rollercoaster day,
with losses fuelled by a weak opening in U.S. markets partly
offset by the success of the Hungarian debt auctions.
                                
 Currencies were initially hit by profit-taking following
this week's robust gains and uncertainty over Polish wage data
and over Latvia's 2010 budget, which the IMF wants more clarity
on before agreeing further funding. [ID:nLG642291]
                                
 Hungary's success in selling 64 billion forints of debt
[ID:nBUD005060], with all three bond auctions oversubscribed,
and the strong earnings posted by JPMorgan [ID:nN16338928]
revived the region. A negative opening in U.S. markets and poor
results of other U.S. firms then hit it again. [ID:nUEN005440].
                                
 "Currencies pulled back as Harley, Google, Marriott, all
posted weak results," one Bucharest dealer said.
                                
 By 1449 GMT, the Polish zloty <EURPLN=> had lost 0.9
percent, the Czech crown <EURCZK=> had weakened by 0.2 percent,
while the Hungarian forint <EURHUF=> had fallen 0.4 percent.
                                
 "The auctions surprised the market a bit, yields were
narrower than expected, but the fact that (debt agency) AKK
could sell more than originally offered is for sure a positive  
sign," a dealer in Budapest said.
                                
 Hungary also announced it has mandated Citigroup and ING
Bank to lead manage a five-year, 1 billion euro bond, seen as a
litmus test to see whether it needs to extend its current IMF
facility. [ID:nLG5032]
                                
 The deal has attracted orders of around 1.75 billion euros
and will be priced on Friday [ID:nLG269599]. The guidance is at
400 basis points over mid-swaps, within a range of plus/minus 5
bps, an official at one of the lead managers said on Thursday.
                                
 This comes after a successful $2 billion 10-year eurobond by
Poland last week and the 1.5 billion euros of 5-1/2 year bonds
issued on international markets by the Czech Republic in April.
All the issues have pointed to increased interest in regional
debt following a rebound in risk appetite in recent months.
                                
 
                                
 DATA STILL POOR
                                
 Romania's leu <EURRON=> edged down slightly after the
finance minister said the economy may drop by 6.5-7.1 percent
this year, much more than an IMF forecast of 4 percent and some
ministers' prediction of about 6 [ID:nLG82979].
                                
 Polish and Hungarian wage data both failed to meet
expectations on Thursday and offered a new example of the
region's economic headaches [ID:nLG26417] [ID:nBUD005058].
                                
 "If this trend (for lower wage growth) continues then
chances for interest rate cuts will increase," said Grzegorz
Maliszewski of Millennium Bank.
                                
 "Long-term bonds could gain because weak wage growth shows
that inflationary pressures... will abate and the inflation
outlook looks positive."
                                
 However, Polish bonds were little changed by the data and
remained stable on the day, after papers' yields fell 3 basis
points across the curve on Wednesday on the successful 5-year
bond auction. [ID:nWAR008545]
                                
 
----------------------MARKET SNAPSHOT--------------------------
Currency                    Latest   Previous Local    Local   
                                
                                  close    currency currency
                                
                                           change   change  
                                
                                           today    in 2009 
Czech crown      <EURCZK=>  25.915   25.855   -0.23%   +3.23%  
Polish zloty     <EURPLN=>   4.321    4.281   -0.93%   -4.77%  
Hungarian forint <EURHUF=> 274.48   273.47    -0.37%   -3.98%  
Croatian kuna    <EURHRK=>   7.335    7.32    -0.2%    +0.41%  
Romanian leu     <EURRON=>   4.232    4.214   -0.43%   -5.14%  
Serbian dinar    <EURRSD=>  92.887   93.217   +0.36%   -3.67%  
 
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond   CZ2YT=RR    +6 basis points to   157bps over bmk*
4-yr T-bond   CZ4YT=RR    -6 basis points to  +162bps over bmk*
8-yr T-bond   CZ8YT=RR   +18 basis points to  +307bps over bmk*
                                
              
Polish treasury bonds <0#PLBMK=>
2-yr T-bond   PL2YT=RR    +6 basis points to  +389bps over bmk*
5-yr T-bond   PL5YT=RR    +6 basis points to  +313bps over bmk*
10-yr T-bond PL10YT=RR    +4 basis points to  +284bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond   HU3YT=RR   +32 basis points to  +739bps over bmk*
5-yr T-bond   HU5YT=RR   +26 basis points to  +659bps over bmk*
10-yr T-bond   HU10YT=RR +23 basis points to  +546bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1749 CET.
Currency percent change calculated from the daily domestic 
close at 1600 GMT.
                                
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(Reporting by Reuters bureaus, writing by Dagmara Leszkowicz
and Marius Zaharia; editing by Richard Hubbard)