* Zloty near three-month low on global worries
* Czech economy expands less than forecast in Q4
* High inflation reduces scope for Romania rate cuts
(Updates throughout)
By Sam Cage and Dagmara Leszkowicz
BUCHAREST/WARSAW, March 11 (Reuters) - The Polish zloty
briefly hit a 3-month low on Friday after a massive earthquake
hit Japan and unrest in Saudi Arabia prompted investors to sell
riskier assets.
The zloty <EURPLN=> -- region's most liquid currency - fell
by 0.5 percent at 1457 GMT, a touch off previous losses, while
other currencies gained, with Hungary's forint leading rises, up
some 0.4 percent.
"Foreign investors had big positions on the zloty and it
seems they're closing them now," said one Warsaw-based dealer.
The region's emerging markets have suffered in the past days
from higher oil prices and investors' growing aversion to risk
prompted by the unrest in the Middle East.
The markets are now keeping a close eye on protests in
leading oil producer Saudi Arabia.
On the bonds market, papers in Poland were flat in thin
trade.
Meanwhile, Hungary's bonds strengthened, with yields falling
some 5-10 basis points across the curve with dealers saying
sentiment among foreign investors will be a key driver for the
market in the coming days.
"Now the risk appetite of foreigners will be decisive (for
bond prices), and they continue to buy Hungarian bonds as we saw
at yesterday's auctions," one Budapest-based dealer said.
Hungary plans to tap an encouraging market response to
fiscal reforms by issuing a new dollar denominated benchmark
bonds after meeting with investors scheduled from mid-March.
[]
CZECH DATA MIXED
The Czech crown <EURCZK=>, the region's best performing
unit, edged some 0.3 percent higher after data showed the
economy expanded by 0.3 percent in the fourth quarter from the
previous three-month period, slower than previously thought.
[]
The Czech central bank said after the data release, economic
growth in the last three months of 2010 were below forecasts due
to weaken-than-expected development in all segments of domestic
demand. []
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.
Elsewhere, Romania's leu <EURRON=> rose 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=> 24.286 24.347 +0.25% +2.94%
Polish zloty <EURPLN=> 4.03 4.01 -0.5% -1.79%
Hungarian forint <EURHUF=> 272.35 273.35 +0.37% +2.07%
Croatian kuna <EURHRK=> 7.389 7.39 +0.01% -0.12%
Romanian leu <EURRON=> 4.185 4.194 +0.22% +1.15%
Serbian dinar <EURRSD=> 102.91 103.09 +0.17% +2.93%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +5 basis points to 12bps over bmk*
7-yr T-bond CZ7YT=RR 0 basis points to +65bps over bmk*
10-yr T-bond CZ9YT=RR +4 basis points to +76bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +5 basis points to +345bps over bmk*
5-yr T-bond PL5YT=RR +4 basis points to +340bps over bmk*
10-yr T-bond PL10YT=RR +5 basis points to +311bps over bmk*
The P
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -2 basis points to +501bps over bmk*
5-yr T-bond HU5YT=RR 0 basis points to +485bps over bmk*
10-yr T-bond HU10YT=RR -6 basis points to +427bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1557 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus; Editing by Ron Askew)
