* Fx lack direction after U.S. data, ahead of G20
* Next week's econ data awaited
* Risks are Polish budget, Czech politics, Hungary rates
(Recasts with fresh prices, comments.)
By Marius Zaharia and Sandor Peto
BUCHAREST/BUDAPEST, Sept 4 (Reuters) - Central Europe's main
currencies moved sideways on Friday, awaiting a flurry of
economic figures next week to see whether recovery was under way
in the recession-hit region.
The currencies shed almost one percent over the week due to
a bout of risk aversion in global markets which show no clear
direction late this week, dealers and analysts said.
They firmed briefly after mixed U.S. job figures, but
retreated as initial optimism on global stock markets abated.
A meeting of G20 states this weekend is expected to promise
to keep economic support packages in place until recovery is
certain.
Industrial output, foreign trade, GDP and inflation figures
to be released next week are seen providing key clues whether
Central Europe's export-driven economies are turning around.
"Positive news showing further industrial recovery does not
seem to have the same positive effect on markets as it did a few
months ago," Danske Bank said in its weekly note on the region.
"The markets have anticipated the industrial recovery by now
and need to see evidence that private consumption is beginning
to pick up," it added.
Hungary's forint <EURHUF=> and Poland's zloty <EURPLN=>
firmed 0.1 percent per euro by 1334 GMT, the Czech crown
<EURCZK=> strengthened 0.2 percent and the Romanian leu shed 0.3
percent, but the markets lacked clear direction, dealers said.
Hungarian medium-term government bond yields dropped by
about 5 basis points, but traders said the market lacked power
after a retreat in the past weeks, which has prompted a cut in
planned issues at bi-weekly auctions.[]
RISKS EYED
While the global market sentiment looks fragile after the
summer rally, investors watch short-term domestic risks in the
region and in the longer run they are likely to prefer the
assets of sounder economies, analysts have said.[]
The zloty is expected to outperform its regional peers,
though Poland's struggle to contain its budget deficit this year
and next to maintain public debt levels below the constitutional
ceiling continues to worry investors.
Traders said investors were keeping a close eye on the
expected 2010 deficit figure which is expected any day.
A large shortfall had been priced in.
"Right now, the talk is of 40 billion zlotys ($13.9
billion), which should be neutral for the market. Something
closer to 45 billion would be a negative news," said one bond
dealer in Warsaw.
The forint, on the other hand, is maintaining an easing bias
as Hungary's fundamentals are weaker and its central bank is
expected to cut interest rates further to aid the economy.
"I expect a range of 270-275 (against the euro), but I think
we can revisit 275 in the short term," one Budapest-based dealer
said. "It's not that risk aversion is rising -- the forint is
less preferred in the region."
The crown has mostly shrugged off uncertainty over the date
of upcoming elections [], but politics is a risk.
"CZK has not reacted to the rising political uncertainty and
continues to track the (global) risk sentiment, but this might
change and CZK could be less favoured compared to its regional
peers, for instance PLN," Danske said.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.519 25.568 +0.19% +4.84%
Polish zloty <EURPLN=> 4.121 4.124 +0.07% -0.15%
Hungarian forint <EURHUF=> 273.48 273.68 +0.07% -3.63%
Croatian kuna <EURHRK=> 7.333 7.343 +0.14% +0.44%
Romanian leu <EURRON=> 4.248 4.237 -0.26% -5.5%
Serbian dinar <EURRSD=> 93.251 93.51 +0.28% -4.04%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -5 basis points to 137bps over bmk*
4-yr T-bond CZ4YT=RR +4 basis points to +157bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -20 basis points to +641bps over bmk*
5-yr T-bond HU5YT=RR -57 basis points to +579bps over bmk*
10-yr T-bond HU10YT=RR -47 basis points to +498bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1534 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Marius Zaharia,
editing by Andy Bruce)
