* Currencies weaker, tracking stocks, euro
* Zloty may notch up longer-term gains
* Bulgarian stocks rise on election result
(Adds detail, fixed income)
WARSAW, July 6 (Reuters) - The Polish zloty and other
currencies in central Europe drifted lower in morning trade on
Monday, taking their cue from regional stocks and the euro.
At 0852 GMT the zloty <EURPLN=> and Hungary's forint
<EURHUF=> were 0.7 percent down against the common currency.
Currencies hit multi-month highs last week during a rally
driven by a strong current account figure in Hungary and an
overall improvement in global sentiment.
But the trend then ran out of steam, affected by falls in
regional stocks which began last Thursday and continued on
Monday, with Warsaw's WIG20 <.WI20> and Budapest BUX <> each
losing more than 1 percent.
"Since there's no crucial data publication in the region,
currencies are likely to follow stocks and moves on the
euro/dollar," said one Warsaw-based dealer. "In summertime
sentiment is the key."
Dealers said Hungary's forint may come under some additional
short-term pressure because of a Deutsche Bank note referring to
its recent outperformance against the Polish currency and
Hungary's high government debt levels.
The Deutsche Bank analysts also said they had closed their
long EUR/PLN recommendation, which may provide some support for
the Polish unit.
Elsewhere in the region, Romania's leu <EURRON=> was
relatively stable on Monday, while the crown <EURCZK=> was down
0.3 percent in thin trade with Czech markets closed due to a
national holiday.
Markets were digesting the results of a parliamentary
election in Bulgaria, where the main centre-right opposition
GERB party looks likely to take power after campaigning against
the outgoing Socialist-led coalition on an anti-graft platform.
Analysts say the relatively clear-cut election result boosts
hopes for economic and anti-corruption reforms in the European
Union's poorest member state, seen as next in line in the region
to seek IMF help. []
Bulgaria, like the Baltic republics, operates a currency
board and its lev unit is pegged to the euro.
The country's main index Sofix <.SOFIX> was bucking the
regional trend on Monday, gaining more than 1 percent.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.94 25.864 -0.29% +3.13%
Polish zloty <EURPLN=> 4.381 4.351 -0.68% -6.07%
Hungarian forint <EURHUF=> 274.33 272.52 -0.66% -3.93%
Croatian kuna <EURHRK=> 7.323 7.334 +0.15% +0.57%
Romanian leu <EURRON=> 4.207 4.205 -0.05% -4.58%
Serbian dinar <EURRSD=> 93.11 93.257 +0.16% -3.9%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +4 basis points to 142bps over bmk*
4-yr T-bond CZ4YT=RR +22 basis points to +191bps over bmk*
8-yr T-bond CZ8YT=RR +12 basis points to +312bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +3 basis points to +397bps over bmk*
5-yr T-bond PL5YT=RR +7 basis points to +331bps over bmk*
10-yr T-bond PL10YT=RR +4 basis points to +294bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +1 basis points to +789bps over bmk*
5-yr T-bond HU5YT=RR +10 basis points to +713bps over bmk*
10-yr T-bond HU10YT=RR +8 basis points to +609bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1152 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Dagmara Leszkowicz;
Editing by Toby Chopra)
