* Stocks rise on technical rebound
* Stocks, output data help zloty regain some ground
* Forint off 9-mth high versus zloty
(Recasts with new comments and prices)
By Jason Hovet and Sandor Peto
PRAGUE/BUDAPEST, March 17 (Reuters) - The Polish zloty
<EURPLN=> rebounded on Thursday, helped by a rise of equities in
Central Europe, but remained close to multi-month lows against
the euro and its regional peer, the Hungarian forint <EURHUF=>.
The region's currencies were rangebound for most of the day,
almost left unfazed by swings in global markets partly caused by
a surge of Japan's yen, while government bonds in the region
outperformed German Bunds.
"(The region) has relatively small exposure to Japan," one
Budapest-based currency dealer said.
The zloty was bid at 4.067 against the euro at 1514 GMT,
while the forint was flat at 273.7 and the Czech crown <EURCZK=>
eased 0.1 percent to 24.42.
The zloty, however, stayed near a 3.5-month low versus the
euro it had hit on Wednesday.
"The zloty is supported by rising stocks. Industrial output
data were also a positive factor, but one has to keep in mind
that sentiment is very fragile and the markets are nervous," one
Warsaw based FX dealer said.
"I expect the zloty to remain in a range of 4.06-4.11 per
euro in the short-term," he added.
The main equity indices in the region firmed by up to 1.6
percent, led by Budapest's BUX <>.
European stocks <FTEU3> halted their recent slide in a
rebound that was seen as technical, as markets continued to fret
over Japan's struggles to cool an overheating nuclear power
plant following last week's earthquake. []
SPLIT OVER RATE PROSPECTS
Poland's industrial output rose 10.7 percent in annual terms
in February, while industrial producer prices surged 7.3
percent. The figures provided arguments for a rise in the Polish
central bank's interest rates next month. []
"It seemed previously that a rate hike in April is a done
deal, but recently released data on wages and inflation somewhat
weakened this view, so the market is now deeply split on this
issue," Michal Jochymek, a fixed income dealer at ING Bank
Slaski said.
Polish government bonds eased slightly, while Czech yields
were mostly stable, with long-end yields rising slightly. The
Czech markets have mostly priced out the chance of a central
bank interest rate hike next week.
Debt spreads in the region over corresponding German Bunds
narrowed by 7-13 basis points.
Despite its rebound, the zloty stayed close to 9-month lows
hit in overnight trade against the forint <PLNHUF=R>.
"This may be simply a carry trade: Hungary's central bank
interest rates are at 6 percent, while the Polish rate is 3.75
percent," one Budapest-based currency dealer said.
A fixed income trader added that Hungarian and Polish debt
yields may continue to converge as Poland will hold elections
this year and that can raise questions about the new
government's policy and the budget deficit trajectory there.
The leu <EURRON=> also rebounded to firm by 0.2 percent
versus the euro to 4.171. Late on Wednesday Romania's government
had survived a fifth no-confidence vote in less than a year,
enabling it to push ahead with International Monetary
Fund-backed reforms. []
"The slight depreciation (in early trade) has to do with
risk aversion," said a trader in Bucharest. "The result of the
no confidence vote is positive for the leu."
Romania sold 5-year Treasury bonds worth 317 million lei,
accepting that yields rose to 7.35 percent, even though analysts
had expected the ministry to reject all bids.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2011
Czech crown <EURCZK=> 24.42 24.399 -0.09% +2.38%
Polish zloty <EURPLN=> 4.067 4.08 +0.32% -2.68%
Hungarian forint <EURHUF=> 273.71 273.68 -0.01% +1.56%
Croatian kuna <EURHRK=> 7.36 7.373 +0.18% +0.27%
Romanian leu <EURRON=> 4.171 4.178 +0.17% +1.49%
Serbian dinar <EURRSD=> 102.87 102.59 -0.27% +2.97%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -11 basis points to 17bps over bmk*
7-yr T-bond CZ7YT=RR -9 basis points to +70bps over bmk*
10-yr T-bond CZ9YT=RR -7 basis points to +72bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -11 basis points to +341bps over bmk*
5-yr T-bond PL5YT=RR -8 basis points to +336bps over bmk*
10-yr T-bond PL10YT=RR -7 basis points to +424bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -13 basis points to +496bps over bmk*
5-yr T-bond HU5YT=RR -13 basis points to +484bps over bmk*
10-yr T-bond HU10YT=RR -7 basis points to +424bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1614 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 Catherine Evans, John Stonestreet, Ron Askew)
