* Currencies move sideways as dlr rebounds, stocks mixed
* Romania postpones euro bond, sees 10 pct cap on yields
* IMF scrutinises Hungary's budget deficit
BUDAPEST, Nov 12 (Reuters) - Central European currencies
moved sideways and equities were mixed on Thursday as regional
markets were kept fragile by budget deficit concerns ahead of
euro zone output and U.S. jobless figures.
Signs of recovery in the developed world are eagerly watched
in the export-reliant region, and a rebound of the U.S. dollar
through the key 1.5 line versus the euro triggered caution after
fluctuations in risk appetite in the past weeks, dealers said.
Recent domestic data suggested that the region's economies
may be past the worst of the crisis, but investors are still
worried that high budget and external deficits and debt can keep
some of them more vulnerable than other emerging markets.
The zloty <EURPLN=> of Poland, which has escaped recession
and is seen the quickest to recover in the region, was flat at
1034 GMT on Thursday, similar to the Hungarian forint <EURHUF=>
and the Czech crown <EURCZK=>.
The zloty led the region's recovery from last week's lows
and analysts said September current account data published
earlier this week could continue to lend the unit support.
"The September current account surprised positively with the
deficit reaching only 57 million euros, and it was substantially
narrower than the market consensus," Citigroup economist Piotr
Kalisz wrote in a morning note.
"Data and in particular strong trade balance figures confirm
our view that the zloty is likely to strengthen in the medium
term. We stick to our forecast of the falling towards 3.80
versus euro in late 2010."
FISCAL CONCERNS
The leu <EURRON=> shed 0.1 percent as Romania's finance
ministry postponed a planned euro bond until 2010 and said it
would not accept yields above 10 percent at domestic debt
tenders.
The International Monetary Fund (IMF) has halted talks with
Romania over a 1.5 billion euro aid tranche originally planned
for December due to the country's government crisis, and
analysts said the ministry may be forced into accepting higher
yields.
The Romanian central bank's intervention policy has helped
the leu stay relatively stable despite the political woes.
But analysts have said the leu and the forint could firm
less in the next year than the crown and the zloty, and their
near-term prospects were also more uncertain.
Local daily Nepszabadsag reported an ongoing review of
Hungary's progress on meeting the terms of its $25.1 billion
IMF-led bailout found that the country was likely to overshoot
its 2009 budget deficit target. []
"Better than expected (Oct.) inflation data (on Wednesday)
probably limited the upside in the (forint) currency as it may
extend the (central bank's monetary) easing cycle," KBC said in
a daily note on the region.
"The underperformance of the forint vs the zloty (in the
past days) is a clear sign about the forint's weaker potential
for further strengthening,".
The crown <EURCZK=>, the region's best performer this year,
inched higher in the past days after an expected interest rate
cut from a record low of 1.25 percent did not manifest last
week. Some analysts say the unit could test the 25 level in the
short run.
Poland's two- and five-year bonds firmed slightly in thin
trade, while 10-year papers weakened on Thursday as concerns
persist that Poland will also overshoot budget deficit targets
in 2010.
"There are not many transactions, but the market improved
slightly," said Krzysztof Izdebski, dealer at PKO BP bank in
Warsaw. "The long end of the curve is slightly weaker due to
fiscal problems."
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.462 25.454 -0.03% +5.07%
Polish zloty <EURPLN=> 4.135 4.135 0% -0.48%
Hungarian forint <EURHUF=> 269.6 269.48 -0.04% -2.24%
Croatian kuna <EURHRK=> 7.29 7.284 -0.08% +1.03%
Romanian leu <EURRON=> 4.293 4.29 -0.07% -6.49%
Serbian dinar <EURRSD=> 94.2 94.058 -0.15% -5.01%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -3 basis points to 107bps over bmk*
7-yr T-bond CZ7YT=RR +2 basis points to +111bps over bmk*
10-yr T-bond CZ10YT=RR +2 basis points to +89bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +3 basis points to +367bps over bmk*
5-yr T-bond PL5YT=RR +3 basis points to +321bps over bmk*
10-yr T-bond PL10YT=RR +2 basis points to +281bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +2 basis points to +520bps over bmk*
5-yr T-bond HU5YT=RR +3 basis points to +457bps over bmk*
10-yr T-bond HU10YT=RR +2 basis points to +396bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1134 CET.
Currency percent change calculated from the daily domestic
close at 1700 GMT.
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(Reporting by Reuters bureaus, writing by Gergely
Szakacs/Sandor Peto; Editing by Andy Bruce)
