* Zloty falls through psychological 4/euro level
* Hungary annual inflation edges up to 4.1 pct in Feb
* Czech economy expands 0.3 pct q/q in Oct-Dec
* High inflation reduces scope for Romania rate cuts
(Adds currency moves, comment, fixed income)
By Sam Cage
BUCHAREST, March 11 (Reuters) - Emerging European stocks
fell and Poland's zloty led currencies lower on Friday after a
massive earthquake hit Japan and unrest in Saudi Arabia knocked
demand for riskier assets.
The deputy head of Poland's central bank said on Thursday he
did not expect the zloty <EURPLN=> to strengthen significantly
this year, helping to push the unit down 0.8 percent by 1034 GMT
and breaching key support at 4.02 per euro. []
Romania's stock market <> fell nearly 2 percent and
other major bourses in the region also lost ground.
The region's emerging markets have suffered from the rises
in oil prices and investors' aversion for risk prompted by
unrest in the Middle East, and markets are eyeing protests in
leading oil producer Saudi Arabia nervously.
"Saudi Arabia will be under the spotlight today and markets
will be keen to assess the potential for some social
disturbances to have a material effect over a political
changeover," BNP analysts said in a note.
Hungary's forint <EURHUF=> was a touch lower at 273.7 per
euro and pushed through support at 272.80, the 50-day moving
average which lent support earlier in the week.
The currency and Hungarian bond yields were little moved by
data showing annual inflation edged up to 4.1 percent in
February -- less than forecast -- while fourth-quarter economic
growth was revised slightly lower. []
"The figures published in the morning had no impact
whatsoever. We still expect no change in central bank interest
rates," said a Budapest-based fixed income trader.
"If the forint doesn't weaken beyond 275 or firm beyond
272.50, we don't see any particular movement (in the bond
market)."
CZECH DATA MIXED
The Czech crown <EURCZK=> was the region's best performing
unit, trading flat at 24.358 per euro after data showed the
economy expanded by 0.3 percent in the fourth quarter from the
previous three-month period, slower than previously thought.
[]
Dealers and analysts said the data was mixed as industrial
output figures showed a pickup. Interest rate swaps fell around
5 basis points after the data, but they mostly tracked euro
rates.
"Nevertheless from a trading point of view, the Czech
currency should be under pressure from mounting global risks and
may test its 55-day moving average (24.42)," KBC said.
Romania's leu <EURRON=> fell 0.2 percent. A central banker
said its monetary policy stance was adequate at the moment,
though inflationary risks are bigger than initially envisaged.
[]
Higher than expected February inflation has prompted some
analysts to change interest rate forecasts, saying it will be
difficult for the central bank to cut borrowing costs as long as
the economy remains weak.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2011
Czech crown <EURCZK=> 24.358 24.347 -0.05% +2.64%
Polish zloty <EURPLN=> 4.041 4.01 -0.77% -2.05%
Hungarian forint <EURHUF=> 273.7 273.35 -0.13% +1.56%
Croatian kuna <EURHRK=> 7.389 7.39 +0.01% -0.12%
Romanian leu <EURRON=> 4.204 4.194 -0.24% +0.69%
Serbian dinar <EURRSD=> 102.82 103.09 +0.26% +3.02%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +6 basis points to 13bps over bmk*
7-yr T-bond CZ7YT=RR -1 basis points to +69bps over bmk*
10-yr T-bond CZ9YT=RR -1 basis points to +79bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +6 basis points to +346bps over bmk*
5-yr T-bond PL5YT=RR +6 basis points to +340bps over bmk*
10-yr T-bond PL10YT=RR +6 basis points to +313bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +1 basis points to +503bps over bmk*
5-yr T-bond HU5YT=RR +1 basis points to +486bps over bmk*
10-yr T-bond HU10YT=RR -1 basis points to +432bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1134 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
(Reporting by Reuters bureaus)
