* FX gains a touch as mkt eyes further clues on Greek aid
* CEE industries in recovery, Czech PMI near record high
* Bonds mixed as mkts eye Czech, Romanian rate decisions
* Hungary econ min sees euro target date by end-2011
(Adds bonds, detail, updates markets)
By Marton Dunai
BUDAPEST, May 3 (Reuters) - Emerging European currencies
were a touch stronger on Monday as investors awaited details of
the Greek bailout, with Greek news still weighing on local
assets despite signs of a strong economic recovery.
European finance ministers triggered a record 110 billion
euro ($147 billion) bailout for Greece on Sunday after the
country committed itself to austerity measures. []
Doubts whether Greece can sustain the austerity steps
weakened the euro further on Monday. []
The Polish zloty <EURPLN=> gained 0.2 percent versus the
euro by 1039 GMT, but Polish markets were closed for the day, as
was the UK, resulting in low liquidity and higher volatility.
The Hungarian forint <EURHUF=> added 0.1 percent, as did the
Czech crown <EURCZK=>. The Romanian leu <EURRON=> was flat.
Czech dealers said overall sentiment was negative because
the Greek plan has not yet been approved around Europe.
"The market is still in a slightly negative mood ... with
worries over public debt" in the euro zone periphery, a Prague
dealer said. "The package has some value but still has to be
approved by parliaments."
A Hungarian dealer said he expected currency trading to be
volatile while the markets await news to flesh out the details
of the package.
"The problem markets face is the lack of a credible track
record, which will take time as Greece embarks on 2 years of
recession," Cheuvreux analysts said in a morning note.
"Portugal, Spain and Italy now have a major opportunity to
jump-start their fiscal consolidation programs to gain market
confidence and avoid a spread blowout," it added.
Purchasing managers' indices rose in the Czech Republic and
dropped Hungary, but both remained above 50, indicating that the
region's recession-hit industries were healing. []
The Czech reading improved to its fourth highest reading
ever, clearly signalling the Czech economy was back on track,
HSBC economist Kubilay Ozturk said.
"Nearly all sub-indices confirm that a wide scale recovery
is already underway," he said. "The undisrupted improvement in
employment is particularly encouraging."
BONDS MIXED
Hungary's new economy minister said the country should be
able to set a target date to join the euro zone by the end of
2011, and that the new government would maintain a strict fiscal
regime and strive to keep the forint stable [].
Markets were little moved. Hungarian bond yields ticked 3-4
basis points lower across the curve in very thin trading.
Czech bonds were mixed, and dealers say some are still
betting on the chance of a rate cut at the central bank policy
meeting on Thursday.
A large majority of analysts in a Reuters poll on Friday saw
no change. []
"Many market participants (in both the money market and the
forex market) have also started to bet on (a cut)," KBC analysts
said.
"These expectations should disappear from prices after the
CNB Board meeting, and this should lead to higher rates at the
short end of the yield curve as well as a stronger koruna again
in the weeks to come."
Romanian markets awaited the central bank's rate decision,
due on Tuesday, in which it was expected to cut rates further
from the current record low of 6.5 percent to aid the
recession-hit economy. []
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.507 25.543 +0.14% +3.18%
Polish zloty <EURPLN=> 3.906 3.915 +0.23% +5.07%
Hungarian forint <EURHUF=> 267.79 267.97 +0.07% +0.96%
Croatian kuna <EURHRK=> 7.261 7.259 -0.03% +0.66%
Romanian leu <EURRON=> 4.126 4.127 +0.02% +2.7%
Serbian dinar <EURRSD=> 99.12 99.03 -0.09% -3.27%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -4 basis points to +58bps over bmk*
7-yr T-bond CZ7YT=RR -6 basis points to +76bps over bmk*
10-yr T-bond CZ9YT=RR -4 basis points to +69bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -6 basis points to +368bps over bmk*
5-yr T-bond PL5YT=RR +3 basis points to +312bps over bmk*
10-yr T-bond PL10YT=RR +4 basis points to +254bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -7 basis points to +438bps over bmk*
5-yr T-bond HU5YT=RR -7 basis points to +404bps over bmk*
10-yr T-bond HU10YT=RR -6 basis points to +352bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1239 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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emerging market news []
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(Reporting by Reuters bureaux, writing by Marton Dunai; Editing
by Ron Askew)
