* German data, Greek woes hit risk appetite, stocks
* Forint leads FX drop, bonds track currencies down
* Leu slightly up as c.bank intervenes, dealers say
(Updates with bonds, new prices)
By Dagmara Leszkowicz and Jason Hovet
WARSAW/PRAGUE, Dec 8 (Reuters) - Hungary's forint led a
central European retreat on Tuesday after disappointing German
data shook the view of the region's recovery, although Romania's
leu was steady as dealers cited central bank intervention.
German industrial output unexpectedly fell in October,
pointing to a slowing recovery for Europe's largest economy and
central Europe's main trade partner that will likely drag on the
region's own path to recovery. []
That was coupled with a Fitch ratings agency downgrade on
euro zone member Greece which drove investors out of riskier
emerging market assets. []
Hungary's forint <EURHUF=> fell 1.5 percent to bid at 273.35
to the euro by 1648 GMT. Government bonds extended losses mostly
on longer-dated papers due to fiscal concerns in the EU's
peripheral countries.
"There have been analysts recently who saw similarities
between the fiscal performance of Hungary (before this year's
budget cuts) and Greece," a Budapest dealer said.
"But the (currency) fall is not very intensive or too
sudden... If the weakening continues, 273.50 and 275 could be
the next levels."
The Polish zloty <EURPLN=> fell 1.4 percent and bonds also
fell. Bourses dropped up to 3 percent led by Budapest <>.
The Czech crown <EURCZK=> lost 0.4 percent, outperforming
after central bank Vice-Governor Mojmir Hampl said he saw no
reason to change his vote for stable interest rates at the next
policy meeting. []
CENTRAL BANK HELP?
Hungary and Romania have both sought International Monetary
Fund aid packages to plug financing gaps, but the help came with
budget constraints that analysts say could weaken their
economies in recovery.
Romania's aid package has been put on hold due to a
political impasse since a government collapse in October.
President Traian Basescu narrowly won a re-election bid over
the weekend, but the result is being challenged by the
opposition, and his prime minister appointees have had trouble
gaining parliamentary support for a new government that can
restart IMF talks. []
The Fund's representative said on Tuesday the IMF is "pretty
firm" on its demand that Romania pass a 2010 budget with a
deficit of 5.9 percent of gross domestic product. []
The leu <EURRON=> was 0.1 percent off against the euro, with
dealers saying the central bank had resumed intervention on the
market. The bank declined to comment.
"The central bank has intervened indirectly to protect the
leu ... though it is hard to say how big the impact from
politics has been and its influence on currency developments,"
said one Bucharest-based dealer. []
Analysts agree the worst of the economic downturn has passed
central Europe's export-reliant economies, and data on Tuesday
showed a rise month-on-month in Hungarian industry's output in
October that suggested recovery was near. []
Czech and Polish data have already shown smaller output
drops than expected. Poland's economy has avoided recession
unlike neighbours.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.717 25.605 -0.44% +4.03%
Polish zloty <EURPLN=> 4.127 4.07 -1.38% -0.29%
Hungarian forint <EURHUF=> 273.35 269.36 -1.46% -3.59%
Croatian kuna <EURHRK=> 7.32 7.285 -0.48% +0.61%
Romanian leu <EURRON=> 4.233 4.23 -0.07% -5.16%
Serbian dinar <EURRSD=> 95.21 95.87 +0.69% -6.02%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +16 basis points to 107bps over bmk*
7-yr T-bond CZ7YT=RR +4 basis points to +99bps over bmk*
10-yr T-bond CZ10YT=RR -4 basis points to +88bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +17 basis points to +547bps over bmk*
5-yr T-bond HU5YT=RR +12 basis points to +502bps over bmk*
10-yr T-bond HU10YT=RR +12 basis points to +443bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1759 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
and Jason Hovet; Editing by Patrick Graham/Ruth Pitchford)
