* FX mostly weaker as investors digest news of Greek aid
* CPI in Romania, Hungary almost in line with fcast
* Polish longer-dated bonds ease ahead of Wed auction
(Adds fixed income, detail)
WARSAW, May 11 (Reuters) - Central Europe's currencies
trimmed some of the previous session's sharp gains on Tuesday as
excitement over the euro zone's aid package gave way to worries
over whether debt-stricken Greece can deliver drastic debt cuts.
The Greek bailout sparked a global markets rally on Monday
and pushed emerging Europe's currencies as much as 3 percent
higher against the euro. But as investors digested the news,
questions over the long-term policy of the monetary union began
to resurface.
"The euphoria is evaporating and concerns over Greek and
other euro zone peripheral states' debts are rising," said one
Warsaw-based dealer.
Moody's rating agency said late on Monday it might downgrade
Portugal's ratings and Greece's rating could fall to as low as
junk. []
At 0916 GMT, Poland's zloty <EURPLN=>, the region's biggest
gainer on Monday, fell 0.9 percent, the same as Hungary's forint
<EURHUF=>.
The Czech crown <EURCZK=> gained some 0.3 percent against
the common currency, while Romania's leu <EURRON=> eased some
0.1 percent against the euro. The leu has lagged the recent
rising trend on IMF comments that the fund would disburse the
next tranche of a 20 billion euro aid deal only after Bucharest
has implemented cost-saving measures.
The Czech bonds were little moved on Tuesday, while the
Polish longer-dated papers were slightly weaker ahead of
Wednesday's bonds tender, where the finance ministry will offer
1.5-3.0 billion zlotys in 5-year paper maturing in 2015.
INFLATION, RATES
In Hungary, data showed inflation in April stood at 5.7
percent, almost in line with the market forecast. The data had
limited impact on the forint and analysts still expect a further
reduction in the main interest rate, now at an all-time-low of
5.25 percent. []
Interest rate cuts are also expected in Romania, where
inflation stood at 4.3 percent last month, but analysts are
split over timing of rate moves.
The Polish inflation data is due to be published on Friday,
with the market expecting the figure to ease below the central
bank's 2.5 percent target for the first time since September
2007, mostly thanks to base effects and a stronger zloty.
Nevertheless, consumer price index is seen accelerating in
2011, thus monetary policy is seen to tighten as soon as the
second half of 2010.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.525 25.61 +0.33% +3.11%
Polish zloty <EURPLN=> 4.037 4.002 -0.87% +1.66%
Hungarian forint <EURHUF=> 274.97 272.52 -0.89% -1.68%
Croatian kuna <EURHRK=> 7.261 7.264 +0.04% +0.66%
Romanian leu <EURRON=> 4.17 4.166 -0.1% +1.62%
Serbian dinar <EURRSD=> 99.81 99.83 +0.02% -3.94%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +4 basis points to 99bps over bmk*
7-yr T-bond CZ7YT=RR +14 basis points to +108bps over bmk*
10-yr T-bond CZ9YT=RR +8 basis points to +98bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +5 basis points to +408bps over bmk*
5-yr T-bond PL5YT=RR +11 basis points to +346bps over bmk*
10-yr T-bond PL10YT=RR +12 basis points to +272bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1116 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 bureaus, Writing by Dagmara Leszkowicz;
editing by Jason Webb/Tony Austin)
