* Romania's c.bank cut rates to record low, as expected
* Hungary's rate decision expected at 1200 GMT
* Czechs will issue eurobonds, bonds market quiet
(Adds fixed income, detail)
WARSAW, March 29 (Reuters) - Romania's leu was slightly
stronger after the country's central bank reduced borrowing
costs to a record low of 6.5 percent on Monday, but the 50 basis
point cut did not have a significant impact on the currency.
Hungary's central bank is also expected to announce an
interest rates decision at 1200 GMT. It is seen cutting rates by
25 basis points to 5.5 percent to support economic recovery.
"Everything seems to come together: at 5.7 percent the rate
of inflation seems of little concern by Hungarian standards, the
economy still needs support and the forint is still being quite
cooperative," analysts at Commerzbank wrote in a morning note.
By 1052 GMT the leu <EURRON=> firmed slightly but hovered
around levels before the announcement. [] Other
currencies were stronger with Poland's zloty <EURPLN=> leading
gains, rising 0.5 percent, and Hungary's forint <EURHUF=> and
the Czech crown <EURCZK=> each up by about 0.2 percent.
The leu had touched its 14-month highs last week but halted
its sharp rises with dealers citing interventions to prevent the
unit from further firming. It joined the forint and the zloty
this week at highs last seen at the turn of 2008/2009.
The region's currencies have benefitted from investors
shifting positions to the region and its better picture on
growth and debt than euro zone peripherals like Greece.
But the market said the risk from Greece has not disappeared
yet and currencies may become volatile further on.
BONDS STABLE
In Poland, the central bank is expected to leave rates
unchanged at an all-time low of 3.5 percent at its meeting on
Wednesday. Reuters' most recent poll shows analysts still
forecast rates to rise to 4 percent at the end of 2010 though
conviction seems to be waning over the two small hikes that
implies.
Analysts also expect Czech rates to close 2010 higher than
the current record low of 1 percent.
The Czech Finance Minister Eduard Janota told Reuters on
Friday the government was preparing a 1 billion euro bond and
hopes the EU agreement to help Greece will improve market
conditions and allow the issue to go ahead. []
The Czech bonds showed little reaction to the minister's
comments and dealers expect it to sell a larger amount that the
one already announced.
Bonds market was also quiet in Poland with the market
already awaiting the rate decision as well as debt supply for
the second quarter due to be published on Wednesday.
"Pre-Easter stabilisation is ahead of us," said one
Warsaw-based fixed income dealer. "Risk appetite is visible, but
the market will closely watch the external situation."
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.392 25.437 +0.18% +3.65%
Polish zloty <EURPLN=> 3.89 3.91 +0.51% +5.5%
Hungarian forint <EURHUF=> 265.04 265.68 +0.24% +2%
Croatian kuna <EURHRK=> 7.26 7.26 0% +0.68%
Romanian leu <EURRON=> 4.067 4.068 +0.02% +4.19%
Serbian dinar <EURRSD=> 99.67 99.61 -0.06% -3.8%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +4 basis points to +71bps over bmk*
7-yr T-bond CZ7YT=RR -1 basis points to +97bps over bmk*
10-yr T-bond CZ10YT=RR 0 basis points to +89bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -1 basis points to +376bps over bmk*
5-yr T-bond PL5YT=RR -3 basis points to +297bps over bmk*
10-yr T-bond PL10YT=RR -1 basis points to +236bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -1 basis points to +470bps over bmk*
5-yr T-bond HU5YT=RR -3 basis points to +398bps over bmk*
10-yr T-bond HU10YT=RR 0 basis points to +373bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1052 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 []
Spot FX rates Eastern Europe spot FX <EEFX=>
Middle East spot FX <MEFX=> Asia spot FX <ASIAFX=>
Latin America spot FX <LATAMFX=>
Other news and reports
World central bank news [] Economic Data Guide <ECONGUIDE>
Official rates [] Emerging Diary []
Top events [] Diaries [] Diaries Index []
(Reporting by Reuters bureaus, Writing by Dagmara
Leszkowicz; editing by Patrick Graham/Ruth Pitchford)
