* Zloty hits 2-month high, CPI eases
* GDP in region improves, supports FX
* Global mood broadly positive as euro zone exits recession
(Updates prices, adds Polish data)
PRAGUE/BUDAPEST, Nov 13 (Reuters) - Poland's zloty neared a
two-month peak on Friday, and currencies across central and
eastern Europe were helped by signs some of its worst-hit
economies were stabilising.
Gross domestic product data out of the Czech Republic,
Slovakia, Romania and Hungary showed year-on-year contractions
but also signs recovery was in motion, with the Czech and Slovak
economies growing on a quarterly basis.[]
Poland, the only country that has avoided recession in the
economic crisis, reports third quarter data later this month.
The zloty has jumped this week on the back of a strengthening
current account balance. []
Polish annual inflation eased to 3.1 percent in October,
below market expectations and the lowest since January, but did
not change the view that the central bank has finished its
easing cycle. []
The central bank last month shifted to an informal neutral
bias on interest rates from a long-held easing bias.
Local bonds were little changed, while the zloty <EURPLN=>
rose 0.4 percent to bid at 4.115 to the euro by 1530 GMT.
Hungary's forint <EURHUF=> rose 0.7 percent to lead gains
and the Czech crown <EURCZK=> bid up a touch at 25.52 per euro.
Markets were all underpinned by a rise for the euro and
global risk appetite after data showed the euro zone exited
recession.
"The big picture is GDP improved, particularly in the Czech
Republic and Romania. I'm a little surprised on the forint
reaction as this number for me was a little disappointing," said
UniCredit strategist Gyula Toth.
He said the data could lead to more differentiation among
currencies in the region going forward.
Third-quarter GDP figures in Western Europe showed recovery
gained traction, and Germany -- the key export market of Central
European states -- posted quarterly growth.[]
HUNGARY, ROMANIA LAGGARDS
The figures showed that Hungary and Romania, where interest
rates are highest in the region, lagged recovery in other
states. Analysts' have said the prospects of the zloty are the
best in the region because Poland's economy looks the strongest.
Hungary's economy contracted by 7.2 percent in the third
quarter in annual terms, slower the second quarter, but more
than analysts' 6.4 percent forecast. []
The Czech economy posted 0.8 percent quarter-on-quarter
growth and previous data was also revised upward. []
Central bank minutes on Friday also showed governor Zdenek
Tuma was again outvoted by the board when it narrowly voted not
to cut interest rates. []
The crown has firmed more than 4 percent this month after
markets reversed expectations for policy easing. Analysts expect
the bank has ended a cycle of 250 basis points in cuts started
last year to bring rates to a record low 1.25 percent.
In Romania, the leu <EURRON=> also edged higher after a much
less than expected year-on-year economic contraction.
But the unit stuck in ranges it has seen over the past few
months as the country stumbles to form a new government, raising
risk to the country's IMF package. [] []
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.522 25.535 +0.05% +4.82%
Polish zloty <EURPLN=> 4.115 4.13 +0.36% 0%
Hungarian forint <EURHUF=> 269.04 270.97 +0.72% -2.04%
Croatian kuna <EURHRK=> 7.301 7.29 -0.15% +0.88%
Romanian leu <EURRON=> 4.298 4.299 +0.02% -6.6%
Serbian dinar <EURRSD=> 94.23 94.2 -0.03% -5.04%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -9 basis points to 99bps over bmk*
7-yr T-bond CZ7YT=RR -1 basis points to +105bps over bmk*
10-yr T-bond CZ10YT=RR -1 basis points to +84bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +2 basis points to +369bps over bmk*
5-yr T-bond PL5YT=RR +1 basis points to +319bps over bmk*
10-yr T-bond PL10YT=RR -1 basis points to +275bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +3 basis points to +522bps over bmk*
5-yr T-bond HU5YT=RR +6 basis points to +461bps over bmk*
10-yr T-bond HU10YT=RR -1 basis points to +392bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1633 CET.
Currency percent change calculated from the daily domestic
close at 1700 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet/Sandor
Peto; editing by Patrick Graham and Andy Bruce)
