* FX mostly stronger, move in ranges ahead of US data
* Local macro data, starting next week, may set trends
* Polish bonds stable after recent rally
(Adds fixed income, detail)
By Dagmara Leszkowicz
WARSAW, Aug 27 (Reuters) - Central European currencies were
mostly stronger on Friday, consolidating the previous session's
small gains, but the market remained wary ahead of a speech from
Federal Reserve chief Ben Bernanke and U.S. GDP data later in
the day.
Dealers said currencies would remain range-bound ahead of
key macro data from the region next week which could influence
currencies' medium-term outlook.
"EEMEA FX markets consolidated somewhat yesterday on the
back of relatively stable equities, but ahead of today's
Bernanke speech and revision of the U.S. Q2 GDP data the trend
remains extremely cautious," Unicredit said in a note.
Poland will release second-quarter gross domestic product
data on Monday, with analysts expecting annual growth of 3.2
percent, up slightly from the previous quarter.
"Data should be consistent with the Monetary Policy
Committee's wait-and-see approach as its expectations are for
flat GDP growth (slightly above 3 pct year-on-year) in upcoming
quarters," analysts at ING bank wrote in a note.
The Polish central bank kept interest rates unchanged this
week for the 14th consecutive month, but signalled that
inflation is likely to accelerate in coming months, reinforcing
expectations of near-term monetary policy tightening.
By 0929 GMT the Polish zloty <EURPLN=> was virtually flat
against the euro 3.981.
Other currencies were slightly stronger, with the Czech
crown <EURCZK=> gaining 0.3 percent and Romania's leu <EURRON=>
up 0.1 percent. Hungary's forint <EURHUF=> also rose 0.1 percent
against the euro, but dealers said worries over Budapest's
fiscal outlook and its rejection of a new IMF deal continued to
weigh on the currency.
Hungary managed to place 50 billion forints of government
bonds on Thursday but a sharp jump in yields and lower demand
indicated that confusing signals from Budapest in the past days
on new talks with the IMF had hit sentiment on Hungarian assets.
Budapest said this week the talks would not lead to a new
aid deal, raising market concerns about its ability to finance
itself solely from the market from 2011.
Economists are now split down the middle over whether
Hungary -- which wants wiggle room in its 2011 budget for tax
cuts -- will at some point return to the IMF for aid.
[]
PRIVATISATION HELPS
Emerging Europe's currencies are expected to firm further in
the longer term, as their economies are perceived as healthier
compared to a heavily indebted euro-zone periphery, but they may
retreat in the next 1-3 months, a Reuters poll showed at the
start of August.
Dealers said the zloty would also be supported by continued
privatisation inflows, with foreign investors interested in
buying state assets converting snapping up the Polish currency.
"So far the zloty is moving in a range, but it may
strengthen and the end of thy year and we are likely to play on
privatisation," said Marcin Bilbin, dealer at Pekao bank in
Warsaw.
Warsaw has already collected some 12.5 billion zlotys from
its 2010 privatisation plan and another 12 billion zlotys are
expected from the sale of stakes in utilities Enea <ENAE.WA> and
Energa. <ID:nLDE67P1GN>.
On the bonds front, Hungary's paper yields added some 2
basis points across the curve, while the Polish papers were
steady with dealers saying market is catching a breath after the
recent rally.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 24.745 24.819 +0.3% +6.36%
Polish zloty <EURPLN=> 3.981 3.981 0% +3.09%
Hungarian forint <EURHUF=> 283.3 283.5 +0.07% -4.57%
Croatian kuna <EURHRK=> 7.28 7.28 0% +0.4%
Romanian leu <EURRON=> 4.244 4.248 +0.09% -0.16%
Serbian dinar <EURRSD=> 105.26 105.063 -0.19% -8.91%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +1 basis points to 115bps over bmk*
7-yr T-bond CZ7YT=RR -1 basis points to +118bps over bmk*
10-yr T-bond CZ9YT=RR +4 basis points to +117bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +2 basis points to +393bps over bmk*
5-yr T-bond PL5YT=RR 0 basis points to +384bps over bmk*
10-yr T-bond PL10YT=RR +4 basis points to +325bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +19 basis points to +628bps over bmk*
5-yr T-bond HU5YT=RR +19 basis points to +592bps over bmk*
10-yr T-bond HU10YT=RR +5 basis points to +506bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1129 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 Susan Fenton)
