* Crown extends gain, other FX down a touch from highs
* Stocks, bonds mixed as markets take a breather
* Greece watched, but CEE has stayed resilient
(Adds bonds, updates prices)
PRAGUE, March 19 (Reuters) - The Czech crown firmed on
Friday and held near multi-month highs with peers in the region
as new worries over Greece's debt failed to dent appetite for
emerging Europe's assets.
Improving economic outlooks for central Europe and the
region's lower debt levels have pushed many investors to take
positions in the region even as concern over debt in euro zone
periphery states rattles euro markets.
The Polish zloty and Hungarian forint have shot to highs
last seen at the end of 2008 this month, while the crown jumped
to a five-month peak on Thursday. Analysts say the region still
has space to advance in the coming sessions.
The crown <EURCZK=> added 0.4 percent from Thursday's close,
bidding at 25.317 to the euro by 1108 GMT. It traded as strong
as 25.25 in the previous session.
The forint <EURHUF=> inched down 0.1 percent, and the
Romanian leu <EURRON=> was also down at 4.077 per euro.
The zloty <EURPLN=> dipped 0.2 percent on the day to bid at
3.885 per euro, about half a percent off this month's high.
Polish central banker Anna Zielinska-Glebocka, a member of the
monetary policy committee, said this week that zloty gains could
postpone tightening of interest rates this year. []
"The market has slowed a bit," a Stockholm-based central
European currency dealer said. "It might (take) time for a
little consolidation before the next big move ... (But) we could
gradually try better levels."
MARKETS SLOW, BUT GAINS STILL SEEN
Prague <> and Warsaw <> stocks slipped from
two-month highs on Friday, taking away some support for
currencies. Budapest <> was the only stock market to gain
with a 0.5 percent rise.
Czech bonds firmed, while Polish and Hungarian debt gave up
recent gains. Hungarian yields have dropped to five-year lows
along the short end on expectations the central bank will cut
interest rates this month.
"Yields rose by about five basis points," one Budapest-based
fixed-income trader said. "I would not even call that a
correction, simply it's Friday, interest in trade is low."
"I think the market will take a pause around the current
levels (in the next days). But of course bids will return if
global markets do not blow up," the trader said.
The region has been mostly immune to Greece's woes, but
dealers said the situation there was still a risk to central
Europe's markets.
Athens raised the stakes on Thursday in its quest for EU
help to tackle its debt crisis, saying it cannot achieve
promised deficit cuts if its borrowing costs remain so high and
may have to call in the IMF as a last resort. []
The zloty, underpinned by Poland being the only EU economy
to avoid recession last year, has led gains among peers with a 6
percent advance since Jan 1.
A rebound in export markets is expected to help central
European currencies appreciate this year. But analysts warn the
strong gains seen already could dent export demand and slow
economic recovery, a concern already voiced by some Polish and
Romanian policymakers.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.317 25.42 +0.41% +3.95%
Polish zloty <EURPLN=> 3.885 3.878 -0.18% +5.64%
Hungarian forint <EURHUF=> 262.62 262.32 -0.11% +2.94%
Croatian kuna <EURHRK=> 7.256 7.256 0% +0.73%
Romanian leu <EURRON=> 4.08 4.075 -0.12% +3.86%
Serbian dinar <EURRSD=> 99.48 99.49 +0.01% -3.62%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -6 basis points to 81bps over bmk*
7-yr T-bond CZ7YT=RR +2 basis points to +120bps over bmk*
10-yr T-bond CZ10YT=RR +2 basis points to +103bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +8 basis points to +385bps over bmk*
5-yr T-bond PL5YT=RR +7 basis points to +313bps over bmk*
10-yr T-bond PL10YT=RR +6 basis points to +248bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +6 basis points to +488bps over bmk*
5-yr T-bond HU5YT=RR +6 basis points to +437bps over bmk*
10-yr T-bond HU10YT=RR +7 basis points to +408bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1209 CET.
Currency percent change calculated from the daily domestic
close at 1700 GMT.
For related news and prices, click on the codes in brackets: All
emerging market news []
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(Reporting by Reuters bureaus, writing by Jason Hovet; Editing
by Susan Fenton)
