*Fx mixed, zloty retreats but crown strongest since Oct
*Greek news, stock falls weigh but outlook positive
*Hungary govt debt firms despite cbank uncertainty
(Recasts with new prices, comments)
BUDAPEST, March 18 (Reuters) - The Czech crown hit a
five-month high on Thursday and Hungarian government debt
strengthened as weak stock markets and new concerns over Greece
only temporarily soured sentiment on European emerging markets.
The Czech and Hungarian stock indices were both down by 1
percent by midday, while the Warsaw and Bucharest stock markets
shed about 0.3 percent as an early firming of the dollar and
news that Greece might turn for aid to the International
Monetary Fund shaved appetite for risk.
The Czech crown <EURCZK=> firmed 0.4 percent to 25.274,
hitting its highest levels since October.
"It is a trend, the sentiment is positive (since strong
fourth-quarter growth data last week)," said Ivo Prokop, a
trader at Raiffeisenbank. "Having broken the 25.400 level, it is
going to continue."
The Romanian leu <EURRON=> was up 0.2 percent and the
Hungarian forint <EURHUF=> recovered early losses and was flat.
The Polish zloty <EURPLN=> eased 0.1 percent against the euro by
1100 GMT.
News about financial problems in the euro zone periphery,
mainly in Greece have often moved Central European currencies in
the past months, but they units have recently become more
resilient as investors expect the region's economies to recover.
Positive sentiment on the region often overshadows negative
domestic news.
The Romanian currency firmed, unaffected by a government
decision to approve wage hikes for subway workers to avoid a
strike, which goes against fiscal tightening pledges.
[]
Romania pledged to cut spending to revive its 20 billion
euro international aid package earlier this year.
The forint was flat at 261.45 to the euro, staying near
15-month highs hit earlier this week and analysts said it may
approach technical levels around 260 in the next few days.
The currency shrugged off a report that the next government
may try to oust the central bank governor [] and
expectations the bank could cut rates again late this month.
[]
The bank has cut rates by 375 basis points since July to a
record low of 5.75 percent.
Hopes for monetary easing and expectations for low supply
[] have fuelled a rally in Hungarian government
debt in the past weeks, pushing three-year yields down to their
lowest level in nearly five years.
GOVERNMENT DEBT FIRMS FURTHER
Demand surged at Hungary's 12-month Treasury bill auction on
Thursday when it sold 40 billion forints worth of paper. The
average yield fell to 5.3 percent from 5.56 percent two weeks
ago. []
Government bond yields in the secondary market also dropped,
by about five basis points, although turnover remained moderate.
"Almost every factor points in the positive direction and
the market neglects anything that would contradict that," one
fixed-income trader said.
Romania's finance ministry tenders 500 million lei ($168.2
million) worth of three-year Treasury bonds on Thursday. Dealers
expect the issue to be oversubscribed.
Polish bonds also firmed slightly.
A Polish policymaker told local media on Thursday that a
rate hike from the current record low of 3.5 percent could be
delayed because of the zloty's recent gains. []
However, National Bank of Poland Governor Slawomir Skrzypek
said it was time to consider rate hikes as the economy will
start gathering steam. []
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.274 25.373 +0.39% +4.13%
Polish zloty <EURPLN=> 3.87 3.865 -0.13% +6.05%
Hungarian forint <EURHUF=> 261.45 261.46 0% +3.4%
Croatian kuna <EURHRK=> 7.253 7.263 +0.14% +0.77%
Romanian leu <EURRON=> 4.07 4.077 +0.17% +4.11%
Serbian dinar <EURRSD=> 99.579 99.56 -0.02% -3.71%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +1 basis points to 89bps over bmk*
7-yr T-bond CZ7YT=RR +2 basis points to +124bps over bmk*
10-yr T-bond CZ10YT=RR +1 basis points to +107bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR 0 basis points to +376bps over bmk*
5-yr T-bond PL5YT=RR +1 basis points to +305bps over bmk*
10-yr T-bond PL10YT=RR +1 basis points to +244bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR 0 basis points to +479bps over bmk*
5-yr T-bond HU5YT=RR +1 basis points to +428bps over bmk*
10-yr T-bond HU10YT=RR +1 basis points to +398bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1200 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 Marton Dunai and
Sandor Peto; Editing by Susan Fenton)
