* Zloty off highs amid spreading risk aversion, helps crown
* Bonds, stocks dip, Warsaw's WIG20 down more than 3 pct
* Market eyes U.S labour market data
(Adds stocks, fixed income, details)
By Dagmara Leszkowicz
WARSAW, Feb 5 (Reuters) - Warsaw stocks recorded their
sharpest fall in three months on Friday and the zloty retreated
with other central European currencies as escalating worries
about debt in the euro zone periphery cut investors' appetite
for risk in the region.
Trading was jittery before U.S. non-farm payrolls data due
in the afternoon that would better gauge the pace of global
economic recovery after recent data added fuel for sharp falls
of assets globally and raised concerns the situation may worsen.
Hungary's industrial output posted its first annual rise for
a year in December, but disappointed with the biggest monthly
fall in 16 months on sluggish export recovery. []
But attention was mostly turned to the euro zone's southern
members where fears spread that heavily indebted countries like
Greece, Spain or Portugal may be unable to cope with the fiscal
and monetary demands of membership. []
Warsaw's blue-chip index <> fell more than 3 percent
to its lowest since November on Friday, leading more than 2
percent falls in central Europe. Prague <> hit a 1-month low.
The spreading worries have hit the euro, central Europe's
reference currency, and reversed gains for currencies like the
zloty and Romania leu that hit 13-month highs this week.
By 1049 GMT, the zloty <EURPLN> was down 0.8 percent against
the euro, trading at 4.097, and has dropped more than 2 percent
in three days after breaking to the strong side of the
psychological level of 4.0 to the euro on Monday.
"The zloty had rallied the most backed by the risk appetite
before problems in the euro zone emerged," said Bartosz
Pawlowski, FX strategist at BNP Paribas in London. "That's why
it's losing the most now."
ACROSS THE BOARD
Hungary's forint <EURHUF=> and the leu <EURRON=> were both
down 0.1 percent against the euro.
Only the Czech crown <EURCZK=> bucked the regions' trend,
rising slightly against the common currency with some dealers
saying the unit was holding up better due to some unwinding of
long zloty positions against the crown.
The stronger dollar has the been the main drag on
currencies, with the region's dollar crosses at the weakest
since last summer.
Some analysts said better than expected US data due at 1330
GMT may halt falls on the emerging markets.
Bond markets were also at a negative territory, with the
Polish paper yields rising some 5 basis points across the curve.
The turnaround in markets was in sharp contrast to gains
since the start of the year, led by the zloty and leu currencies
which has risen more than 3 percent one point.
Ratings agency Standard & Poor's said on Thursday it could
change its credit rating outlook for Romania if the country
continues to implement IMF-prescribed reforms in the coming
months. [].
Analysts said the news could be supportive for the leu but
the global situation overshadowed its positive impact.
The country's central bank cut its benchmark rate by 50
basis points to 7 percent on Wednesday and warned that enforcing
tough measures agreed with the International Monetary Fund was
essential for recovery. []
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26.198 26.221 +0.09% +0.46%
Polish zloty <EURPLN=> 4.097 4.066 -0.76% +0.17%
Hungarian forint <EURHUF=> 274.05 273.74 -0.11% -1.35%
Croatian kuna <EURHRK=> 7.319 7.314 -0.07% -0.13%
Romanian leu <EURRON=> 4.14 4.134 -0.14% +2.35%
Serbian dinar <EURRSD=> 98.61 98.71 +0.1% -2.77%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -3 basis points to 103bps over bmk*
7-yr T-bond CZ7YT=RR +3 basis points to +150bps over bmk*
10-yr T-bond CZ10YT=RR +4 basis points to +139bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +5 basis points to +398bps over bmk*
5-yr T-bond PL5YT=RR +3 basis points to +342bps over bmk*
10-yr T-bond PL10YT=RR +2 basis points to +303bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +1 basis points to +558bps over bmk*
5-yr T-bond HU5YT=RR +3 basis points to +527bps over bmk*
10-yr T-bond HU10YT=RR +2 basis points to +474bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1049 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 Toby Chopra)
