* Currencies rebound, led by forint
* Forint jumps as optimism helps emerging currencies
* IMF mission finishing in Hungary
* Polish zloty still weaker
(Recasts with new prices, comments.)
By Sandor Peto and Jason Hovet
PRAGUE, May 18 (Reuters) - Central Europe's main currencies
rebounded on Monday after positive U.S. corporate news raised
market appetite for riskier assets, led by Hungary's forint
which was boosted by demand from an overseas bank.
The forint <EURHUF=> traded at 284.30 against the euro at
1417 GMT, firmer by 0.6 percent from late Friday.
Finance Minister Peter Oszko said Hungary and the IMF agreed
the country's 2009 budget deficit target would be raised to 3.9
percent of GDP from 2.9 percent. []
The visiting IMF delegation concluded the quarterly review
of international aid secured by Hungary in October and an EU
official said the country is on track to receive the third
instalment of its bailout money later this year. []
"Investors' risk appetite has started to strengthen
slightly," one Budapest-based dealer said.
"(But) the forint found a resistance at 284 (against the
euro), and it may not firm further now," the dealer said. "The
news about the budget deficit had no significant impact, we knew
it earlier that the target could be raised."
Dealers said the forint outperformed other currencies in the
region partly because one large foreign bank was buying it
against the euro and the dollar in a relatively illiquid market.
In Romania, the leu <EURRON=> edged up 0.3 percent against
the euro to 4.168, off a two-week low of 4.2 per euro from the
previous session after data on Friday showed the Romanian
economy shrank 6.4 percent on the year in the first quarter of
2009, more than double economists' forecasts.
Stock markets in the region rebounded from earlier falls,
with Budapest's BUX index<> gaining 2.5 percent, Poland's
WIG20<> firming 1.6 percent, while Prague's PX <> was
still down by 0.2 percent.
The Czech crown <EURCZK=> was flat at 26.855 against the
euro and dealers said it remained fragile, while Poland's zloty
<EURPLN=>, which led earlier losses in the region, rebounded,
though it was still down by 0.5 percent at 4.469.
"The key factor for the zloty is the latest data on the
Polish current account balance as it is in surplus for a second
consecutive month," said Jakub Wiraszka, dealer at BRE bank in
Warsaw. "I think that keeps the zloty away from the global risk
aversion and potential sharp losses," he said.
Currencies have fallen in the past week due to signs that
any global economic recovery will be slow, while a rally of over
30 percent in stock prices since March has cooled, taking away
some FX support.
World Bank President Robert Zoellick said in Warsaw that the
global economy may return to growth in late 2009 or in 2010, and
that Poland was better positioned than many other countries to
weather the global financial crisis.[]
Hungarian, Czech and Slovak GDP shrank much more than
expected in the first quarter as the global downturn hurt their
export-driven economies.
Strategists expect pressure to remain as the crisis hits
banks further and costs jobs, but they also say global news will
also drive risk sentiment.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26.855 26.855 0% -0.38%
Polish zloty <EURPLN=> 4.469 4.445 -0.54% -7.92%
Hungarian forint <EURHUF=> 284.3 286.02 +0.6% -7.3%
Croatian kuna <EURHRK=> 7.365 7.377 +0.16% 0%
Romanian leu <EURRON=> 4.168 4.181 +0.31% -3.69%
Serbian dinar <EURRSD=> 94.186 94.026 -0.17% -5%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +3 basis points to 153bps over bmk*
4-yr T-bond CZ4YT=RR +3 basis points to +199bps over bmk*
8-yr T-bond CZ8YT=RR +18 basis points to +285bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -20 basis points to +892bps over bmk*
5-yr T-bond HU5YT=RR -57 basis points to +814bps over bmk*
10-yr T-bond HU10YT=RR -45 basis points to +697bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1427 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet/Sandor
Peto; editing by Toby Chopra)
