* Forint weaker, cbank keeps rates on hold as forecast
* Market awaits Polish wage data
* Worries over possible Greek debt restructuring weigh
(Adds fixed income, detail)
By Dagmara Leszkowicz and Michael Winfrey
WARSAW/PRAGUE, April 18 (Reuters) - Hungary's forint eased
slightly against the euro on Monday, extending recent losses
after the central bank kept interest rates steady and an
official warned the government could miss its target for budget
revenue.
Currencies have so far shrugged off negative news coming
from the heavily-indebted euro zone periphery nations, but
market participants say a possible restructuring of Greece's
debt could affect the CEE region.
Following a jump in inflation to 4.5 percent, Hungary's
central bank kept rates on hold at 6 percent on Monday, a move
expected by investors who have shifted from expectations earlier
this year that four new members on the board could ease policy
to support the government's pro-growth strategy. []
"The newly appointed rate-setters have been moderate and
well-aware of market risks, therefore no extreme and sudden
moves should be expected," said CIB Bank analyst Gyorgy Barta.
"Risks suggest rates could remain on hold, with the MPC
adopting a wait-and-see stance in the coming months."
By 1230 GMT the forint <EURHUF=> traded at 267.300 per euro,
down some 0.25 percent.
Hungary's ruling party Fidesz will also pass a new
constitution through parliament on Monday, despite a boycott
from opposition parties which say it lacks consensus and would
cement the ruling party's power beyond the end of its term.
[]
The country's Economy Ministry State Secretary Gyorgy
Naszvadi said Hungarian corporate and value-added tax revenues
may be lower than in government plans in 2011 but its deficit
goal remained attainable []
Fiscal policies across the region remain in focus,
especially in Poland, where growing doubts over a persistent
failure to adopt rigorous fiscal reforms may shift investor
interest to Hungary. []
KEY WAGE DATA
The Polish zloty <EURPLN=> edged down 0.43 percent as the
market awaited data on March wages due at 1200 GMT, which should
signal whether recent rises in consumer prices have started to
translate into wage increases.
"If last month's wages rose more slowly than expected by
analysts, the zloty could fall towards 3.97 against the euro, as
this scenario would decrease the chances for swift monetary
policy tightening," Bank BPH analysts wrote in their research.
Analysts have started to bet on a rate increase next month
as inflation in March accelerated to 4.3 percent, well above the
central bank's target of 2.5 percent +/- 1 percentage point.
But Governor Marek Belka dampened some of the expectations,
saying the MPC should not base its decision on monthly data.
MPC member Adam Glapinski echoed this view in an interview
for Bloomberg on Monday, saying the bank would make a serious
mistake by raising borrowing costs in May. []
Elsewhere, Romania's leu <EURRON=> was virtually flat and
the Czech crown <EURCZK=> gained 0.27 percent.
Government leaders in the Czech Republic meet on Monday to
debate the future of the centre-right government after a
corruption scandal brought it to the brink of collapse.
Parties pledged on Friday to stick with their alliance but
they are still discussing what steps they will take to overcome
the lack of trust, potentially including a cabinet reshuffle and
additions to the coalition contract.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2011
Czech crown <EURCZK=> 24.175 24.24 +0.27% +3.41%
Polish zloty <EURPLN=> 3.966 3.949 -0.43% -0.2%
Hungarian forint <EURHUF=> 267 266.5 -0.19% +4.11%
Croatian kuna <EURHRK=> 7.356 7.329 -0.37% +0.33%
Romanian leu <EURRON=> 4.089 4.09 +0.02% +3.52%
Serbian dinar <EURRSD=> 101.33 101.33 0% +4.54%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +7 basis points to -8bps over bmk*
7-yr T-bond CZ7YT=RR +4 basis points to +49bps over bmk*
10-yr T-bond CZ9YT=RR +5 basis points to +65bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +6 basis points to +321bps over bmk*
5-yr T-bond PL5YT=RR +7 basis points to +312bps over bmk*
10-yr T-bond PL10YT=RR +4 basis points to +285bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -5 basis points to +457bps over bmk*
5-yr T-bond HU5YT=RR +2 basis points to +429bps over bmk*
10-yr T-bond HU10YT=RR -4 basis points to +381bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1429 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 Stephen Nisbet)
