* FX edge up; forint moves sidelines before elections
* Greece comes back into focus
* Czech finmin says eurobond possible within the next month
(Adds fixed income, Czech eurobond plans, detail)
By Marius Zaharia
BUCHAREST, April 6 (Reuters) - The Polish zloty traded near
a 16-month peak on Tuesday and other central European currencies
edged up as renewed optimism about global recovery following
stronger U.S. data outweighed worries on indebted Greece.
The region's better debt picture has attracted some of the
outflows from the euro zone's periphery this year, buoying
currencies.
The global mood also improved over a prolonged weekend when
data on Monday showing the U.S. services sector grew at its
fastest pace in nearly four years added to optimism sparked by
Friday's payrolls report [].
But worries over Greece resumed after a report by Market
News International quoted senior government sources saying the
government wants to amend a deal struck at an EU Summit last
month to bypass an International Monetary Fund contribution.
[]
At 0930 GMT, the zloty <EURPLN=> was 0.2 percent up from
Friday's close, the Czech crown <EURCZK=> was 0.4 percent
stronger, while the Romanian leu <EURRON=> was flat.
Bond markets were stable and dealers said investors remain
upbeat on regional debt. Czech Finance Minister Eduard Janota
said the market situation was positive and a planned eurobond
was possible within the next month []
"The mood is positive after U.S. (data) ... but Greece
remains a problem," one dealer in Bucharest said.
HUNGARY'S ELECTION
The forint <EURHUF=> moved sideways at the start of the
final week before a first round of parliamentary elections on
Sunday.
Centre-right opposition party Fidesz is widely expected to
win and govern alone. The grouping will need to kickstart the
economy after its deepest recession in nearly two decades, while
keeping a tight grip on the budget.
A poll showed on Sunday that Fidesz has widened its lead
over the ruling Socialists []. Investors are likely
to be cautious until the new government takes its first reform
measures after campaigning on new jobs and tax cuts.
"Only major core market shocks can move the forint out of
its current range," a dealer in Budapest said. "Otherwise, we'll
wait until after the elections."
In Czech Republic, retail sales fell 2.1 percent on the
year, compared with a forecast of a 3 percent decrease, while
trade figures for February came in slightly above expectations
[] [].
The crown was not moved by the data.
Markets were gearing up for trade and industry figures in
Romania, Hungary and Czech Republic this week, looking for signs
about the pace of the region's recovery which may reshuffle
expectations on interest rates.
Romania and Hungary cut interest rates to record lows last
month to help their economies out of recession, while Czech
Republic and Poland kept borrowing costs flat.
The surprise came from Czech Republic, where two central
bankers voted for a rate cut, curbing expectations for hikes in
the second half of the year.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.271 25.36 +0.35% +4.14%
Polish zloty <EURPLN=> 3.836 3.843 +0.18% +6.99%
Hungarian forint <EURHUF=> 265.56 265.02 -0.2% +1.8%
Croatian kuna <EURHRK=> 7.27 7.27 0% +0.54%
Romanian leu <EURRON=> 4.094 4.092 -0.05% +3.5%
Serbian dinar <EURRSD=> 99.45 99.43 -0.02% -3.59%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -7 basis points to 66bps over bmk*
7-yr T-bond CZ7YT=RR -3 basis points to +89bps over bmk*
10-yr T-bond CZ10YT=RR -11 basis points to +80bps over
bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -4 basis points to +346bps over bmk*
5-yr T-bond PL5YT=RR -6 basis points to +291bps over bmk*
10-yr T-bond PL10YT=RR -6 basis points to +237bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -1 basis points to +452bps over bmk*
5-yr T-bond HU5YT=RR -7 basis points to +388bps over bmk*
10-yr T-bond HU10YT=RR -7 basis points to +357bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1130 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Marius Zaharia;
Editing by Ruth Pitchford)
