* Surging stocks boost sentiment for emerging Europe
* Poland to place bond for up to $1.5 bln
* Romania rejected all bids for 3-yr bonds
(Updates throughout)
By Sam Cage and Dagmara Leszkowicz
BUCHAREST/WARSAW, July 8 (Reuters) - Emerging Europe's
currencies extended a positive week on Thursday after
improving risk appetite, fuelled by gains in global shares,
prompted investors to seek riskier assets.
"Sentiment is improving. Stocks are rising, the euro is
gaining against the dollar and if it breaches 1.27-1.275 it may
go to 1.3," said one Warsaw-based dealer, adding that such a
move was very supportive of the region's currencies.
By 1428 GMT the forint <EURHUF=> led gains, rising 1.2
percent. Poland's zloty and the Czech crown <EURCZK=> added 0.5
percent and 0.3 percent respectively.
Stocks in central Europe were also mostly in the black,
mostly rising 0.5-4.0 percent, with only Warsaw's WIG20 <>
hovering around its previous close.
The region's currencies are expected to firm against the
euro in the next six to 12 months, with Poland's zloty and the
Czech crown rising above 2010 highs, though the euro zone's debt
crisis remains a threat, a Reuters poll showed on Thursday.
[]
Czech central bank governor Miroslav Singer said on Thursday
the country's interest rates were likely to stay at record lows
for longer than had been expected. Markets are pricing in no
change for at least the rest of 2010. []
DEBT IN FOCUS
Poland said it will issue up to 1.5 billion dollars in
dollar-denominated bonds this week, with HSBC, Barclays and
Nomura as lead managers. []
So far this year it has placed bonds denominated in Swiss
francs worth 625 million francs and paper denominated in euros
worth 4.25 billion euros.
In Hungary, demand was strong for a sale of 50 billion
forints of 12-month bills, with investors bidding for 99.99
billion forints. The yield edged 2 basis points higher from the
previous auction in June to 5.43 percent. []
Hungary's bond yields dropped some 10-15 basis points across
the curve, following rises in the forint. Polish bonds were
slightly weaker, with dealers citing some profit taking after a
recent rally.
Romania rejected all bids at a tender to sell 3-year
treasury bonds, signalling the finance ministry is still
unwilling to sell debt at yields above 7 percent and may
struggle to finance its budget deficit. []
The cost of insuring the sovereign debt of both Romania and
Hungary fell, with Romanian credit default swaps (CDS) at 372.8
basis points from a previous close of 381. Hungarian CDS fell to
324.3 points from 332.8.
Romania's leu <EURRON=> was flat, having risen in the last
week since the IMF released the latest tranche of a 20 billion
euro bailout deal for the country.
It was little changed after data showed industrial output
rose 4.1 percent on the year in May. []
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.4 25.483 +0.33% +3.61%
Polish zloty <EURPLN=> 4.076 4.098 +0.54% +0.69%
Hungarian forint <EURHUF=> 279.89 283.35 +1.24% -3.41%
Croatian kuna <EURHRK=> 7.186 7.188 +0.03% +1.71%
Romanian leu <EURRON=> 4.228 4.227 -0.02% +0.22%
Serbian dinar <EURRSD=> 103.753 103.56 -0.19% -7.59%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +21 basis points to 127bps over bmk*
7-yr T-bond CZ7YT=RR -9 basis points to +129bps over bmk*
10-yr T-bond CZ9YT=RR -3 basis points to +140bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -3 basis points to +390bps over bmk*
5-yr T-bond PL5YT=RR -2 basis points to +371bps over bmk*
10-yr T-bond PL10YT=RR +2 basis points to +315bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -19 basis points to +584bps over bmk*
5-yr T-bond HU5YT=RR -16 basis points to +555bps over bmk*
10-yr T-bond HU10YT=RR -15 basis points to +461bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1628 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Sam Cage and Reuters bureaus; Editing by Hugh
Lawson, John Stonestreet)
