* Forint up on news of GM investment in Hungary
* Romanian politics may pressure leu further, dealers say
* Other currencies tread water, awaiting Fed meeting
(Updates with GM news, fixed income)
WARSAW, Sept 21 (Reuters) - The forint edged up on Tuesday
after General Motors announced a new investment in Hungary,
while other central European currencies were mostly flat on
uncertainty over the outcome of a U.S. Federal Reserve meeting
later in the day.
General Motors [] said it would invest 500 million
euros ($655 million) to expand capacity at its Opel factory in
Hungary, where it will produce three new engine lines from 2012
and will offer 800 jobs. []
"The forint is a touch stronger. It looks like the
information moved the market," said one Warsaw-based dealer.
"Certainly the news is positive for the forint."
By 0928 GMT Hungary's unit <EURHUF=> was some 0.3 percent
stronger at 279.93.
Among other currencies, the Czech crown <EURCZK=> and
Poland's zloty <EURPLN=> were almost unchanged and Romania's leu
<EURRON=> was some 0.1 percent down against the euro.
Stocks in central Europe were all in the black, adding some
0.4-1.3 percent across the region, while bond markets moved
sideways in very quiet trade.
Trade across the region was slow amid uncertainty about what
the Federal Reserve will say about policy after a meeting on
Tuesday and how global markets will react. []
"Regional sentiment is relatively good. We should move in a
range (on the zloty) but I expect trade to be quiet until the
Fed meeting," the dealer said.
POLITICAL CONCERNS
Dealers said Romania's currency could be vulnerable after
the opposition party said it planned to file a no-confidence
motion against the government, probably at the end of next
month. []
Recession-hit Romania must implement austerity measures to
secure an IMF-led aid package, but the steps have made the
centrist coalition government deeply unpopular. Political
experts say the chances of the cabinet falling by the end of
2010 are rising gradually.
Anti-austerity protests are planned in Bucharest and Prague
this week, while Budapest starts talks with unions on wage
proposals.
Still, analysts say the region's governments are unlikely to
be deterred from cutting their budgets.
Elsewhere, Poland's central bank releases net inflation data
at 1200 GMT although dealers said the reading was unlikely to
affect the currency market.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 24.616 24.619 +0.01% +6.91%
Polish zloty <EURPLN=> 3.94 3.941 +0.03% +4.16%
Hungarian forint <EURHUF=> 279.93 280.73 +0.29% -3.42%
Croatian kuna <EURHRK=> 7.282 7.281 -0.01% +0.37%
Romanian leu <EURRON=> 4.267 4.261 -0.14% -0.69%
Serbian dinar <EURRSD=> 105.17 105.32 +0.14% -8.83%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR 0 basis points to 95bps over bmk*
7-yr T-bond CZ7YT=RR -3 basis points to +88bps over bmk*
10-yr T-bond CZ9YT=RR +1 basis points to +92bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +2 basis points to +386bps over bmk*
5-yr T-bond PL5YT=RR -2 basis points to +360bps over bmk*
10-yr T-bond PL10YT=RR +1 basis points to +302bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -3 basis points to +577bps over bmk*
5-yr T-bond HU5YT=RR -2 basis points to +536bps over bmk*
10-yr T-bond HU10YT=RR +1 basis points to +442bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1128 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;
Editing by Hugh Lawson)
