* Fx deepen loss on Ukraine concern, stocks, bonds ease
* Romania awaits election, Hungary cbank meeting
(Updates with Ukraine concern, stocks, new prices)
By Jason Hovet and Sandor Peto
PRAGUE/BUDAPEST, Nov 20 (Reuters) - Central European
currencies extended losses on Friday, and equities and bonds
also fell after growing concern over Ukraine sovereign debt
heightened already rising risk aversion to emerging assets.
While there was no evidence of Ukraine's debt problems
worsening, dealers said there was market talk of Ukraine's
sovereign standing after its state railway company said last
week it would seek to restructure a $550 million loan.
[]
Currencies fell as much as 1 percent for a second straight
day, losing also on Thursday when getting swept up in selling
after capital controls pressures rose in emerging markets.
"The profit-taking scenario was already in the air," one
Stockholm-based dealer of Central European currencies said.
Price moves were also exaggerated by illiquid end-week trade
as markets look ahead to a presidential election in Romania on
Sunday and an expected Hungarian interest rate cut on Monday.
The forint<EURHUF=> fell more than one percent to the euro
from opening levels to 271 before rebounding to 269.3 by 1415
GMT, weaker by 0.6 percent from Thursday's close. Hungarian
government bond yields rose by around five basis points.
The Czech crown<EURCZK=> eased 0.8 percent versus the euro,
the Polish zloty<EURPLN=> shed 0.2 percent and the region's main
stock indices lost 0.1-0.5 percent. Romania's leu<EURRON=> eased
0.2 percent, retreating from a five-week high.
Volatility has risen since the summer for the region's
markets, with doubts still over the pace of global economic
recovery and that the market rebound can create asset bubbles.
The crown lost 1.6 percent this week, the zloty 1.1 percent
and the forint 0.2 percent, but the units were still firmer by
2-2.7 percent from the end of last month.
ROMANIAN POLITICS, HUNGARIAN RATES
In the longer term the currencies of Poland and the Czech
Republic -- economies with sounder fundamentals -- can
outperform, but in periods of swings in the global mood the
region's units often move in tandem, analysts have said.
On Friday the zloty eased less than the forint and the crown
after Finance Minister Jacek Rostowski said a 2010 growth rate
of 2.5 percent -- as forecast this week by the OECD but double
the ministry estimate -- could not be ruled out. []
The Romanian leu has been stuck in tight ranges much of this
year as central bank intervention risk hangs over the unit.
It held around 4.28 to the euro on Friday before the first
round of presidential elections on Sunday, and weeks after the
International Monetary Fund suspended further aid to Romania due
to its government crisis.
"If the political turmoil calms down and a new government is
established, this should be very positive for the leu exchange
rate over the medium and long term," Raiffeisen said in a weekly
report on the region.
The central bank of Hungary, which is in deep recession like
Romania, is expected to cut interest rates by 50 basis points to
6.5 percent on Monday [] and dealers said government
bonds can firm if the bank's rhetoric remains dovish.
Czech central bank interest rates are at an all-time low at
1.25 percent, but central bank Vice-Governor Miroslav Singer
said on Thursday an interest rate cut would not be a mistake
despite being outvoted by colleagues this month. []
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.86 25.657 -0.78% +3.45%
Polish zloty <EURPLN=> 4.144 4.134 -0.24% -0.7%
Hungarian forint <EURHUF=> 269.3 267.6 -0.63% -2.14%
Croatian kuna <EURHRK=> 7.322 7.323 +0.01% +0.59%
Romanian leu <EURRON=> 4.281 4.275 -0.14% -6.23%
Serbian dinar <EURRSD=> 94.262 94.39 +0.14% -5.07%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +5 basis points to 109bps over bmk*
7-yr T-bond CZ7YT=RR -1 basis points to +111bps over bmk*
10-yr T-bond CZ10YT=RR -1 basis points to +93bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -2 basis points to +534bps over bmk*
5-yr T-bond HU5YT=RR 0 basis points to +485bps over bmk*
10-yr T-bond HU10YT=RR -1 basis points to +412bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1515 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet/Sandor
Peto)
