* Zloty, forint jump on EU crisis plan
* Hungary stocks jump the most since late-2008, yields fall
* IMF readies Romania aid tranche after cost cuts
(Updates prices, adds Romania/IMF)
By Jason Hovet
PRAGUE, May 10 (Reuters) - The Polish zloty jumped more than
3 percent and Hungarian stocks shot up 8 percent to lead central
Europe's rally after the European Union and IMF agreed a 750
billion euro ($1 trillion) rescue package to stop the Greek debt
crisis from spreading.
The package, the biggest since G20 leaders pooled cash after
the Lehman Brothers collapse stoked the financial crisis in
2008, was put in place over the weekend to greet markets on
Monday, sparking a surge but leaving longer-term questions for
the monetary union. []
Central European assets won back much of the losses suffered
in the past month due to fears Greece's struggle to pay its debt
would spread to other indebted euro zone periphery states like
Spain or Portugal.
"It's just real money coming back again, after a week of
panic," a Warsaw dealer said.
The zloty <EURPLN=> surged the most in more than a year to
bid at 3.98 to the euro. The forint <EURHUF=> jumped 2.3 percent
over Friday levels to 273.4 per euro by 0702 GMT, and government
bond yields fell around 50 basis points.
The Romanian leu <EURRON=> and Czech crown <EURCZK=>, which
have been steadier during market turmoil of the last month, rose
1 percent and 0.7 percent respectively from Friday.
Stock markets also recovered with Budapest <> rising 9
percent in its biggest daily gain since the financial crisis
started. Prague <> jumped the most this year with a 6 percent
rise and Warsaw <> gained 4.7 percent.
"It's obviously the ... euro package," a Budapest dealer
said. "That seems to have soothed worries."
REDUCES RISK
The size of the deal, along with an unexpected pledge from
the European Central Bank to buy euro zone bonds if needed,
boosted confidence among investors who had shunned riskier
emerging market assets in the past week. []
Central European had gained sharply to start the year when
the Greece crisis first started hurting markets due to the
region's better growth outlook and lower debt piles, but came
under pressure when investors feared the crisis would spread.
"These measures reduce the risk of disorderly depreciations
of CE4 currencies, but do not create the foundations for renewed
appreciation trends," said Wood & Co economist Raffaella Tenconi.
"We reaffirm our view that the feeble eurozone growth
outlook and ongoing restructuring of domestic demands in the CE4
imply that further appreciation from current levels is
unwarranted."
In Romania, the IMF said the country's cost-cutting measures
may include the loss of 250,000 public sector jobs over the
coming years, in a sign the government was pushing ahead with
austerity plans to meet conditions on its own EU/IMF aid.
[]
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.546 25.73 +0.72% +3.02%
Polish zloty <EURPLN=> 3.981 4.123 +3.57% +3.09%
Hungarian forint <EURHUF=> 273.44 279.63 +2.26% -1.13%
Croatian kuna <EURHRK=> 7.264 7.264 0% +0.62%
Romanian leu <EURRON=> 4.155 4.195 +0.96% +1.98%
Serbian dinar <EURRSD=> 99.83 99.89 +0.06% -3.96%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +18 basis points to 126bps over bmk*
7-yr T-bond CZ7YT=RR -20 basis points to +97bps over bmk*
10-yr T-bond CZ9YT=RR -16 basis points to +93bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -64 basis points to +563bps over bmk*
5-yr T-bond HU5YT=RR -80 basis points to +478bps over bmk*
10-yr T-bond HU10YT=RR -78 basis points to +396bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1029 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, editing
by Jason Webb)
