* Currencies rebound, forint, leu still in the red
* U.S. payroll data improve sentiment
* CEE CPI, GDP data to be eyed next week
(Adds details, background, fixed income)
By Jason Hovet and Sandor Peto
PRAGUE/BUDAPEST, March 6 (Reuters) - Central European
currencies rebounded from early losses on Friday as investors'
appetite for risk in global markets increased after the U.S.
published February job data.
The dollar eased and equities in the world firmed after the
data showed a deep cut in jobs but painted a better outlook for
the U.S. and the global economy than many investors had feared.
The currencies of Central Europe's export-heavy economies
may extend gains next week if the global sentiment remains good,
but the rebound after a turbulent week may be caused by pre-week
end position closings and jitters may return, dealers said.
"There is a little relief rally (after the jobs data) but
the underlying sentiment in central Europe is not good," one
dealer based in Prague said.
The Czech crown<EURCZK=> firmed 1.1 percent to a 27.565 bid
against the euro by 1443 GMT from Thursday's domestic close and
the Polish zloty<EUPLN=> gained half percent to 4.701.
Romania's leu<EURRON=> shed 0.2 percent to 4.286 per euro
but it stayed in the past months' tight ranges in which it has
been held by covert central bank intervention, dealers said.
Hungary's forint<EURHUF=>, at 314.90, stood sharply firmer
from record lows touched in early trade at 317.45, though it was
still weaker by 0.7 percent from Thursday's domestic close.
Sinking outlooks for central Europe's once-booming
economies, along with worries over some countries' high exposure
to foreign credit and banking stability have put the region's
currencies under heavy pressure in 2009.
The currencies fell on Thursday partly because European
Central Bank chief Jean-Claude Trichet rejected calls from the
region to loosen the terms for moving towards the euro zone.
The forint has been hit hardest this week, with many earlier
in the week taking short bets against it using fundamentally
stronger peers like the Czech crown and Polish zloty.
Some analysts and dealers believe that some currencies in
the region, like the forint, can ease more than others in the
next weeks and months.
A Reuters poll of analysts showed on Thursday that the
currencies would rebound from their losses only in more than six
months' time and that they are expected to move together despite
differing fundamentals.
Hungarian government bond yields rose by some 50 basis
points on Friday and the cost of insuring Hungarian government
debt rose to a record high. []
Hungary's central bank and financial market regulator PSZAF
said late on Thursday that the financial situation of banks in
Hungary was stable and clients' money was safe. []
"I don't think that these news will set the trend next
week," one Budapest-based dealer said. "On a chart basis the
forint may rebound to 303-305 next week, if the sentiment in
emerging markets remain good, though the weakening trend stays."
The Hungarian statement added to calls from other regulators
in the region in the last week, who have also hit back at
reports in some media that they said distorted reality.
DATA, REGIONAL EFFORTS EYED
A possible deepening of the global crisis and its impacts on
the Central Europe casts a shadow on the currencies, and the
region's states will release a string of key figures including
inflation and fourth-quarter economic growth next week.
Analysts have also said that coordinated verbal intervention
and policy action in the region can be a good strategy to defend
the currencies against further weakness even though investors
were aware of fundamental differences within the region.
"The very active verbal intervention in the markets leaves
the impression that there is little or no co-ordination
among CEE policymakers concerning crisis management," Danske
Bank said in its weekly note on the region.
"This is regrettable and has already added to increasing
volatility in the CEE markets," it added.
The spotlight on the region, which is seen as one of the
most vulnerable areas in the global downturn, has pushed
policymakers -- especially in Poland and Czech Republic -- on
the defensive to point out different fundamentals.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 27.565 27.862 +1.08% -2.95%
Polish zloty <EURPLN=> 4.701 4.724 +0.49% -12.47%
Hungarian forint <EURHUF=> 314.9 312.83 -0.66% -16.31%
Croatian kuna <EURHRK=> 7.425 7.416 -0.12% -0.81%
Romanian leu <EURRON=> 4.286 4.277 -0.21% -6.34%
Serbian dinar <EURRSD=> 94.887 94.36 -0.56% -5.7%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +27 basis points to 260bps over bmk*
4-yr T-bond CZ4YT=RR -14 basis points to +251bps over bmk*
8-yr T-bond CZ8YT=RR 0 basis points to +312bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -5 basis points to +451bps over bmk*
5-yr T-bond PL5YT=RR 0 basis points to +403bps over bmk*
10-yr T-bond PL10YT=RR +2 basis points to +342bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -24 basis points to +1263bps over bmk*
5-yr T-bond HU5YT=RR -58 basis points to +1124bps over bmk*
10-yr T-bond HU10YT=RR -44 basis points to +933bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1543 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet/Sandor
Peto; Editing by Ruth Pitchford/Victoria Main)
