By Sandor Peto
BUDAPEST, Dec 12 (Reuters) - Central European currencies and
equities fell on Friday as risk aversion rose slightly after
talks in the U.S. on a rescue plan for automakers collapsed, and
economic figures in the region indicate bleak growth prospects.
Czech industrial output data released on Friday showed a 7.6
percent annual fall in October, the worst result in almost eight
years [], while final Hungarian output figures
confirmed a 7.2 percent annual decline.
"The story is that the U.S. auto bailout plan failed which
will have an impact as some of the companies affected also
operate in the region," one Budapest-based dealer said.
Among currencies, Poland's zloty <EOURPLN=> led the losses,
falling 1.56 percent to 3.969 against the euro by 0828 GMT ahead
of the publication of October current account data at 1300 GMT.
"A high current account deficit in Poland, expected fall of
output in the euro zone and retail sales in the U.S. won't help
the zloty either," Bank BPH wrote in a note to clients.
The Czech crown <EURCZK=> shed 0.8 percent to 25.945,
Hungary's forint <EURHUF=> lost 0.56 percent to 264.38, while
the Romanian leu <EURRON=> weakened by 0.2 percent to 3.914.
In equity markets, Budapest's BUX index<> fell by three
percent to 12,307, Prague's PX<> declined by 2.6 percent to
825.6 and Warsaw's WIG<> shed 2.3 percent to 2.3.
"Everything is going downhill fast after the plan to save
U.S. automakers failed," said a dealer with a foreign bank in
Bucharest.
Early on Friday the leu hit a two-month low of 3.93 per
euro. It has eased for weeks as demand by companies for euros
rose and due to political uncertainty over the outcome of a Nov.
30 parliamentary election, which kept foreign players away.
Meanwhile, the Democrat-Liberal Party and the leftist Social
Democrats that finished almost level in the election will
continue negotiations to form a coalition government.
In Hungary, Finance Minister Janos Veres said 2009 inflation
may significantly undershoot the 4.5 percent assumption in the
state budget, probably cutting some state revenues.
[].
Government bond yields rose by about 10 basis points as
offers increased after a slump in yields in the past days.
"I don't think that there is room for a big yield rise, next
year's (bond) supply will be very low," one trader said.
Deteriorating growth prospects and a decline in inflation
have been fuelling expectations for central bank interest rate
cuts in the region.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2008
Czech crown <EURCZK=> 25.945 25.74 -0.8% +2.08%
Polish zloty <EURPLN=> 3.969 3.908 -1.56% -10.23%
Hungarian forint <EURHUF=> 264.38 262.9 -0.56% -4.56%
Croatian kuna <EURHRK=> 7.181 7.181 0% +1.99%
Romanian leu <EURRON=> 3.914 3.906 -0.2% -9.32%
Serbian dinar <EURRSD=> 86.5 85.731 -0.9% -9.83%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +10 basis points to 173bps over bmk*
5-yr T-bond CZ5YT=RR +10 basis points to +138bps over bmk*
10-yr T-bond CZ9YT=RR +11 basis points to +108bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -35 basis points to +717bps over bmk*
5-yr T-bond HU5YT=RR -45 basis points to +665bps over bmk*
10-yr T-bond HU10YT=RR +16 basis points to +545bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 0928 CET.
Currency percent change calculated from the daily domestic
close at 1500 GMT.
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(Reporting by Reuters bureaus, Writing by Sandor Peto;
Editing by Tony Austin)
