* FX mixed, zloty retreats but crown strongest since Oct
* Greece weighs but investors focus more on recovery, rates
* Romanian, Hungarian debt auctions well bid
(Adds quotes, detail)
By Sandor Peto and Marius Zaharia
BUDAPEST/BUCHAREST, March 18 (Reuters) - The Czech crown hit
a five-month high on Thursday and investors snapped up Hungarian
and Romanian debt as fresh concerns over Greece only temporarily
soured sentiment on European emerging markets.
Improved economic prospects signalled by last week's
fourth-quarter growth data have boosted the crown recently and
dealers expect it to firm further after breaking a key technical
levels of 25.4 per euro.
The crown <EURCZK=> had firmed 0.2 percent to 25.326 per
euro by 1450 GMT, after hitting its highest since October at
25.25 per euro.
"If this trend continues, the crown can attack to the 25.00
(per euro) level," Raiffeisenbank said in its afternoon note.
The Polish zloty <EURPLN=> and the Hungarian forint
<EURHUF=> were both down 0.2 percent, off recent 15-month highs
as renewed worries about Greece hurt investors' risk appetite.
On Tuesday, reports that Greece may ask the International
Monetary Fund for help raised doubts that the European Union was
solidly behind Greece. []
News about financial problems in the euro zone periphery,
mainly in Greece, have often moved Central European currencies
in the past months, but units have recently become more
resilient as investors expect the region's economies to recover.
SHINING DEBT
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.
Demand surged at a 12-month T-bill auction on Thursday when
Hungary sold 40 billion forints worth of paper. []
"The bottom (of yields) is not visible. The market is dry,
everybody wants to buy. A big, almost 350 billion forint expiry
of 2010/C bonds will come in less then a month."
"There is a chance that all long-end yields come down below
7 percent and an even bigger part of the short-end will be below
6 percent," one Budapest-based fixed income trader said.
In Romania, yields fell further at a three-year bond tender
on Tuesday, touching levels below the central bank's key
interest rate as investors speculate on monetary policy easing.
But analysts say a plunge in Romanian debt yields this year
is close to a trough and secondary debt market rates could tick
higher in the second half as the central bank is expected to
stop cutting interest rates.
The Romanian leu <EURRON=> edged up on Thursday, 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.
Hungary's forint 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. []
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.326 25.373 +0.19% +3.92%
Polish zloty <EURPLN=> 3.874 3.865 -0.23% +5.94%
Hungarian forint <EURHUF=> 262.04 261.46 -0.22% +3.17%
Croatian kuna <EURHRK=> 7.256 7.263 +0.1% +0.73%
Romanian leu <EURRON=> 4.073 4.077 +0.1% +4.04%
Serbian dinar <EURRSD=> 99.549 99.56 +0.01% -3.69%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +3 basis points to 91bps over bmk*
7-yr T-bond CZ7YT=RR 0 basis points to +123bps over bmk*
10-yr T-bond CZ10YT=RR +1 basis points to +106bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -6 basis points to +379bps over bmk*
5-yr T-bond PL5YT=RR 0 basis points to +306bps over bmk*
10-yr T-bond PL10YT=RR -8 basis points to +245bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -8 basis points to +476bps over bmk*
5-yr T-bond HU5YT=RR -9 basis points to +423bps over bmk*
10-yr T-bond HU10YT=RR -10 basis points to +394bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1650 CET.
Currency percent change calculated from the daily domestic
close at 1600 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/Sandor
Peto/Marius Zaharia; Editing by Toby Chopra)
