* Region rides continuing global risk appetite
* Successful bond sales in Hungary, Poland spark optimism
(Adds bonds, comments, updates market)
By Marton Dunai
BUDAPEST, July 21 (Reuters) - Central European currencies
benefited from continued global risk appetite and got additional
boosts from successful bond sales to trade slightly stronger on
Tuesday morning, while bonds held steady.
The zloty, the crown and the forint were each about 0.2
percent stronger at 0918 GMT. Other regional currencies were
little changed.
The zloty profited from a central banker's remarks that the
country's revised plans for a 2014 euro entry were realistic, a
Budapest-based dealer said. []
Dealers said investors would watch U.S. corporate results
and a speech by Federal Reserve Chairman Ben Bernanke in
Congress later on Tuesday. []
"Optimism on global financial markets supports investors'
appetite and demand for riskier assets, including the central
European ones," bank Komercni Banka said in a morning note.
Poland's central bank publishes June net inflation data at
1200 GMT and analysts expect the figure to come in at 2.7
percent. A lower reading might raise the chances of another rate
cut at the next rate-setting meeting. A rate cut is otherwise
seen unlikely, analysts said. <ECONPL>
Stock markets edged higher in the region. An S&P downgrade
of Hungary's Banking Industry Country Risk Assessment
[] was shrugged off in Hungary where OTP <OTPB.BU>
gained.
Other banks, mainly in Poland, slid.
The leu was flat, showing little reaction to a remark from
Romanian Economy Minister Adriean Videanu that the country's
budget deficit would be 7 percent, far above the IMF-agreed 4.6
percent. []
BONDS STEADY
Regional bond markets were stable on Tuesday, with Poland
and Hungary benefiting from recent positive news.
Poland sold $1.5 billion worth of dollar-denominated 10-year
bonds late on Monday. []
"Information about the bond issue in the U.S. is positive,
as it shows Poland has no problem placing its debt," said a
dealer at Warsaw-based bank Remigiusz Zalewski.
Hungarian yields were unchanged as well, with the market
illiquid. The general global optimism maintained an upside bias,
a dealer in Budapest said.
"We're looking to see if they raise the amounts of next
week's bond auctions again," he added.
Hungary raised the offer in each of its last two bond
auctions and sold 84.5 billion forints ($437 million) worth of
bonds last week, as well as a 1 billion euro eurobond.
The Czech Finance Ministry will also hold a 10-year
government bond auction <CZ1002471=> on Wednesday.
"The bond auction tomorrow might spark some minor selling
interest on the longer end, on the other hand, this would be the
last long-term auction until September, and of relatively small
amount," said Dalimil Vyskovsky, a fixed income trader at
Komercni Banka.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.79 25.845 +0.21% +3.73%
Polish zloty <EURPLN=> 4.268 4.277 +0.21% -3.58%
Hungarian forint <EURHUF=> 272.8 273.2 +0.15% -3.39%
Croatian kuna <EURHRK=> 7.332 7.332 0% +0.45%
Romanian leu <EURRON=> 4.234 4.237 +0.07% -5.19%
Serbian dinar <EURRSD=> 92.98 93.112 +0.14% -3.76%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -16 basis points to +135bps over bmk*
4-yr T-bond CZ4YT=RR +2 basis points to +177bps over bmk*
8-yr T-bond CZ8YT=RR +7 basis points to +301bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -4 basis points to +372bps over bmk*
5-yr T-bond PL5YT=RR -4 basis points to +304bps over bmk*
10-yr T-bond PL10YT=RR -3 basis points to +276bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -22 basis points to +720bps over bmk*
5-yr T-bond HU5YT=RR -62 basis points to +626bps over bmk*
10-yr T-bond HU10YT=RR -49 basis points to +519bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1118 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
(Reporting by Marton Dunai; Editing by Ruth Pitchford)
