* Currencies, stocks rebound from Tuesday's slump on EUR/USD
* Polish c.bankers quash rumours of managed float move
* Romania readies for austerity, unions ready to strike
(Updates throughout)
By Sandor Peto and Jason Hovet
BUDAPEST/PRAGUE, May 26 (Reuters) - The Polish zloty and
Hungarian forint led a rebound in central European currencies on
Wednesday, while Romanian shares jumped more than 9 percent to
recover most of the previous session's heavy losses.
Central European assets recovered from the previous day's
slump on easing risk aversion and as investors hunted for
bargains on hard-hit stock exchanges.
Bucharest <> gained back much of its 11 percent fall on
Tuesday. The leu <EURRON=> edged up 0.2 percent, trailing
central European peers as markets worry growing protest over
government plans to cut wages and pensions will sidetrack the
country's IMF aid.
Romanian trade unions plan to stage a one-day general strike
in early June. Governments in the past have bowed to pressure
from unions, which are powerful in the Balkan state.
[]
Dealers have said the central bank would likely move to curb
the leu's weakening. The leu has been emerging Europe's least
volatile currency so far this year and for most of 2009, and
dealers say the central bank has intervened repeatedly.
"The strike should scare some people, but the central bank
is on stand-by," one dealer said.
The zloty <EURPLN=> rose 0.8 percent to 4.122 per euro by
1430 GMT, while the forint <EURHUF=> gained 0.7 percent and the
Czech crown <EURCZK=> added 0.2 percent.
Two Polish central bankers knocked down speculation that the
country was heading toward a managed float of the zloty.
The zloty has swung widely in the past two months in the
3.80 to 4.20 per euro range, and markets speculated the bank and
finance ministry wanted to keep the currency within this band.
"There wasn't even an academic discussion about changing it,
so we cannot talk about having a managed float these days. Our
aim is to prevent excessively fast zloty changes," Adam
Glapinski told Reuters. []
In Serbia, dealers said the central bank intervened for the
sixth time in 10 days to halt the slide of the dinar after the
unit fell to a new record low against the euro.[]
CZECH ELECTIONS, BONDS
Czech markets were looking to a weekend election whose
outcome is far from clear and could lead to weeks or months of
political wrangling. Analysts and dealers expect this to start
weighing more on Czech bonds and the crown.
The Czech Finance Ministry sold more than planned in an
auction of a benchmark 2019 bond on Wednesday as dealers said it
was ramping up its borrowing pace. So far this year, it has
raised less than a quarter of its 2010 gross borrowing need.
The yield on the bond <CZ1002471=> rose 5 basis points on
the day on secondary markets.
Dealers said sentiment to the region remained fragile with
concern the euro zone debt crisis could widen continuing to cast
a shadow to the markets of Central Europe, which is heavily
reliant on exports to the euro zone.
The nervousness of markets could lead Hungary's bank to stop
its rate cuts, dealers said.
In Poland, whose large consumer base kept the economy out of
recession last year, a dip in retail sales did not change
analysts' outlook on the recovering economy.
The head of the statistics office said on Wednesday that the
economy maintained its rate of expansion in the first quarter,
after growing at 3.3 percent in the preceding quarter.
[]
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.604 25.65 +0.18% +2.79%
Polish zloty <EURPLN=> 4.122 4.155 +0.8% -0.44%
Hungarian forint <EURHUF=> 278.02 279.92 +0.68% -2.76%
Croatian kuna <EURHRK=> 7.267 7.27 +0.04% +0.58%
Romanian leu <EURRON=> 4.166 4.176 +0.24% +1.71%
Serbian dinar <EURRSD=> 102.913 102.49 -0.41% -6.83%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -9 basis points to 123bps over bmk*
7-yr T-bond CZ7YT=RR +2 basis points to +149bps over bmk*
10-yr T-bond CZ9YT=RR -1 basis points to +144bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -4 basis points to +411bps over bmk*
5-yr T-bond PL5YT=RR -14 basis points to +384bps over bmk*
10-yr T-bond PL10YT=RR -7 basis points to +325bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -7 basis points to +578bps over bmk*
5-yr T-bond HU5YT=RR -12 basis points to +549bps over bmk*
10-yr T-bond HU10YT=RR -6 basis points to +475bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1633 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, Writing by Gergely Szakacs;
Editing by Ruth Pitchford/Toby Chopra/Jason Webb)
