* Czech lower house approves fiscal austerity plan
* Poland agrees with Eureko to postpone PZU meeting
* Mkts eye Polish, Hungarian, Romanian rate moves next week
(Adds new quote, prices)
By Marius Zaharia and Dagmara Leszkowicz
BUCHAREST/WARSAW, Sept 25 (Reuters) - The Czech crown edged
up after parliament approved a fiscal austerity plan for the
next year, while the Polish zloty was down on Friday amid
uncertainty over a possible big dividend payout.
In the Czech Republic, the lower house of parliament
approved a $4 billion package of tax hikes and spending cuts on
Friday, cutting next year's expected budget deficit and removing
a threat by the prime minister to resign. []
"Usually any political turmoil is bad for a currency, but in
this case we should remember that the crown is still a safe
haven among emerging Europe's currencies," said Ulrich
Leuchtmann, analyst at Commerzbank.
"As for the (fiscal) plan it was just needed to adjust the
fiscal policy to the current economic environment."
By 1325 GMT, the crown <EURCZK=> was up 0.1 percent to the
common currency, trading at 25.182, slightly off session lows,
but a touch stronger than levels before the vote.
Other currencies also gained slightly with Hungary's forint
<EURHUF=> and Romania's leu <EURRON=> adding 0.3 percent and 0.4
percent to the common currency.
In Poland, the government agreed with Dutch firm Eureko
<EUREK.UL> on Thursday to postpone by a week a shareholder
meeting of Polish insurer PZU. []
Fears that Poland, which holds 55 percent of PZU, would back
it paying a 12 billion zlotys dividend and that Eureko may
convert its part into euros have weighed on the zloty this week.
The zloty <EURPLN=> was 0.3 percent down to the euro and
traded at 4.198.
In contrast, the Polish bonds strengthened on Friday,
especially long-end of the curve and dealers said they're still
benefiting from the impact of a successful tender on Wednesday
[].
RATE MEETINGS IN FOCUS
Meanwhile, the Czech central bank left rates unchanged at a
record low of 1.25 percent on Thursday, in line with
expectations. But the bank made dovish comments which analysts
said left the door open to one more possible cut in November.
"Two board members did vote for a cut, which is still
possible in our view," Cheuvreux said in a note.
There are more central bank meetings in the region next
week, with Hungary and Romania expected to cut rates by 50 basis
points [] [], while Poland is seen
holding fire [].
In Romania, the leu tested the key 4.2/euro level after it
had gained gradually on the back of the International Monetary
Fund (IMF) approval of a second loan tranche late on Monday.
Earlier in the day the government's forecasting agency said
Romania's economy is likely to contract by 7.7 percent this
year, slightly less than 8-8.5 percent IMF forecast.
[]
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.182 25.206 +0.1% +6.24%
Polish zloty <EURPLN=> 4.198 4.186 -0.29% -1.98%
Hungarian forint <EURHUF=> 269.71 270.6 +0.33% -2.28%
Croatian kuna <EURHRK=> 7.287 7.263 -0.33% +1.07%
Romanian leu <EURRON=> 4.197 4.212 +0.36% -4.35%
Serbian dinar <EURRSD=> 92.643 93.197 +0.6% -3.41%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +4 basis points to 169bps over bmk*
7-yr T-bond CZ7YT=RR +2 basis points to +182bps over bmk*
10-yr T-bond CZ10YT=RR +2 basis points to +174bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -3 basis points to +386bps over bmk*
5-yr T-bond PL5YT=RR -3 basis points to +332bps over bmk*
10-yr T-bond PL10YT=RR -2 basis points to +290bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -7 basis points to +553bps over bmk*
5-yr T-bond HU5YT=RR +2 basis points to +513bps over bmk*
10-yr T-bond HU10YT=RR -3 basis points to +435bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1625 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Marius Zaharia and
Dagmara Leszkowicz, Editing by Andy Bruce and Toby Chopra)
