* Crown, zloty lead gains, output data may boost FX further
* Polish bonds steady after Wednesday rally on debt comments
(Adds fixed income, detail)
By Dagmara Leszkowicz
WARSAW, Sept 17 (Reuters) - The Czech crown and Poland's
zloty led gains early on Thursday boosted by foreign investors'
strong appetite for their countries' assets as well as improving
domestic data.
The Polish bonds were stable on Thursday after yields had
fallen some 13-17 basis points across the curve on Wednesday on
information Poland may rely more on foreign debt markets for
financing its rising borrowing needs and scrap long-term zloty
bonds issues until the end of 2009. []
"Good sentiment on the zloty is likely to be supported by
foreign investors' interest in the country's assets," analysts
at BRE bank in Warsaw wrote in a note. "Also industrial output
data should support the currency."
Poland's statistics office releases industrial output as
well as producers' prices index data for August at 1200 GMT with
analysts expecting output to have risen 0.4 percent
year-on-year.
Dealers said the zloty could even hit the key level at 4.07
to the euro in the short-term.
"The holiday is over, liquidity is back and London is
definitely bullish on the zloty," said Tomasz Niemiec, dealer at
Millennium bank.
At 0858 GMT the zloty <EURPLN=> and the crown <EURCZK=> were
both 0.4 percent up against the euro, trimming some of its
opening gains when the crown hit its 9-month highs at 24.977 to
the euro earlier in the day.
The Polish bonds were stable ahead of the output data but
dealers said there's still a potential for further growth.
"This is a clear signal for buying (the debt)," said Henryk
Sulek, dealer at Millennium Bank in Warsaw. "If there's no
supply (of the long-dated papers), the market has to take what
is out there."
In the Czech Republic analysts said postponement of the snap
poll until June could provide further support to the crown as it
is seen positive for the budget.[]
However, some analysts said the political turmoil and
uncertainty over the next year's budget may finally affect the
currency.
The region's other currencies were also stronger, with the
Hungary's forint <EURHUF=> and Romania's leu <EURRON=> up 0.2
percent and 0.1 percent respectively.
The forint continued its firming after breaking a
psychological level of 270 to the euro but dealers said there
remained little room to continue gains.
"We've been firming for too long and too much. I think the
likelihood of a turnaround is increasing. Even if sentiment
doesn't change, stop-loss orders could shake the market a bit
today given this firming," one Budapest-based dealer said.
Hungary's gross wage growth picked up to an annual 1.4
percent in July after a 1.1 percent rise in June but analysts
said the data did not affect the currency. []
In Romania the consolidated budget deficit rose to 4.4
percent of gross domestic product in the first eight months of
the year, the finance ministry said on Wednesday, up roughly one
percentage point from January-July period. []
"The deficit should matter for the leu as a negative," said
one dealer in Bucharest. "The jump on the month was a bit much.
This should rise the country risk."
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.054 25.159 +0.42% +6.78%
Polish zloty <EURPLN=> 4.114 4.129 +0.36% +0.02%
Hungarian forint <EURHUF=> 269.89 270.32 +0.16% -2.35%
Croatian kuna <EURHRK=> 7.284 7.285 +0.01% +1.11%
Romanian leu <EURRON=> 4.257 4.262 +0.12% -5.7%
Serbian dinar <EURRSD=> 93.3 93.37 +0.08% -4.09%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -1 basis points to 197bps over bmk*
7-yr T-bond CZ7YT=RR -3 basis points to +171bps over bmk*
10-yr T-bond CZ10YT=RR -2 basis points to +172bps over
bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -3 basis points to +366bps over bmk*
5-yr T-bond PL5YT=RR -1 basis points to +328bps over bmk*
10-yr T-bond PL10YT=RR -2 basis points to +271bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -5 basis points to +593bps over bmk*
5-yr T-bond HU5YT=RR -1 basis points to +529bps over bmk*
10-yr T-bond HU10YT=RR -2 basis points to +449bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 0958 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
(Reporting by Reuters bureaus, writing by Dagmara
Leszkowicz; Editing by Toby Chopra)
