* Czech, Hungary, Romania GDP data show recession
* FX steady to end losing week
* Risk sentiment lower, main driver for FX now
* Bonds steady in calm trade
(Adds fixed income, fresher quote)
By Dagmara Leszkowicz
WARSAW, May 15 (Reuters) - Central European currencies edged
lower on Friday in the face of grim GDP data throughout the
region, although markets calmed to some extent to end a losing
week.
The Hungarian, Romanian, Slovak and Czech economies all
posted larger than expected falls in the first quarter, but
dealers said investors stuck to the sidelines as currencies had
already traded on a weaker footing for much of the week.
"The data out this morning was terrible," a central European
currency trader in Stockholm said. "But it's already been a
rough week... and people are reluctant ahead of the weekend."
Central Europe's stocks tracked western peers higher on
Friday as financial stocks led gains, with Prague's index <>
rising more than 2 percent.
At 0917 GMT the Czech crown <EURCZK=> and Romania's leu
<EURRON=> were 0.3 percent and 0.5 percent down respectively
against the euro, while the forint <EURHUF=> was moving around
its closing level at 287.8 to the euro.
Data showed Hungary's and Romania's economies both slumped
by an annual 6.4 percent, worse than expectations for -5.9
percent and -2.6 percent respectively.
The Czech economy fell a record 3.4 percent in the first
quarter, but did not perform as badly as neighbouring Slovakia,
which fell 5.4 percent.
Poland, whose more closed economy is seen better off, is due
to publish its first quarter GDP data on May 29, with analysts
forecasting around 1 percent expansion.
The zloty <EURPLN=>, which is off 3 percent in the past
week, bid 0.3 percent lower on Friday.
"Very weak GDP data is a big threat to the whole region, but
it is unlikely to affect currencies significantly for as long as
the sentiment does not worsen visibly," one Warsaw-based dealer
said.
In Germany, the region's largest export market, GDP
contracted by a much larger than expected 3.8 percent in the
first three months of 2009, easily its worst performance since
reunification in 1990. []
TREND CHANGE
The forint rose to a nearly four-month high last week, up
more than 13 percent from a record low of 317.45 hit in March.
But it has led a sharp reversal in currencies this week with
a 4 percent fall after risk sentiment shifted following weak
U.S. retail sales data on Wednesday, which dashed many hopes for
a quick rebound in the global economy.
Central Europe's export-reliant economies have been punished
by falling western demand for their cars, auto parts,
electronics and other goods. Economists say a rebound in U.S.
and European consumption is needed for a sustained recovery.
Rate setters in the region have dropped interest rates by
several percentage points to combat sinking economic outlooks,
but have slowed the pace of easing to protect currencies.
Minutes from the Czech central bank's meeting last week gave
some more signals that interest rates were near a bottom, which
help buoy Czech bonds on Friday, dealers said.
Meanwhile Polish paper was slightly stronger, but dealers
said the market seeks any stronger signal for any trend further.
The country's statistics office said on Thursday inflation
jumped to an almost six-month high, cementing expectations the
central bank's Monetary Policy Council (MPC) is likely to hold
fire with rates in May. []
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26.958 26.87 -0.33% -0.76%
Polish zloty <EURPLN=> 4.482 4.468 -0.31% -8.19%
Hungarian forint <EURHUF=> 287.81 288.00 +0.07% -8.43%
Croatian kuna <EURHRK=> 7.377 7.347 -0.41% -0.16%
Romanian leu <EURRON=> 4.189 4.168 -0.5% -4.17%
Serbian dinar <EURRSD=> 94.12 94.727 +0.64% -4.93%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +6 basis points to 151bps over bmk*
4-yr T-bond CZ4YT=RR -6 basis points to +199bps over bmk*
8-yr T-bond CZ8YT=RR +8 basis points to +281bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -3 basis points to +449bps over bmk*
5-yr T-bond PL5YT=RR +1 basis points to +352bps over bmk*
10-yr T-bond PL10YT=RR 0 basis points to +310bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1017 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)
