(adds detail, fresh quotes, fixed income)
By Marius Zaharia
BUCHAREST, Feb 13 (Reuters) - Most central European
currencies firmed on Friday, with the help of rising equity
markets globally, shrugging off data showing Hungary entered
recession and expectations that its regional peers may follow.
Shares world-wide were boosted by talk of a U.S. programme
to subsidise mortgages and that a G7 meeting on Friday and
Saturday would soften the blow of the global downturn.
By 1027 GMT, the Hungarian forint <EURHUF=> firmed 0.5
percent and the Czech crown <EURCZK=> gained 0.3 percent while
the Polish zloty <EURPLN=> and the Romanian leu <EURRON=> were
little changed from Thursday's domestic close.
"The Dow recovered in late trade yesterday, and after that
the forint was stable and it even firmed. This (international)
impact overshadows everything at the moment, compared to that
the figures do not really count," one dealer in Budapest said.
Data showed on Friday Czech GDP grew 1.0 percent on the year
in the fourth quarter, compared with forecasts of 0.2 percent
[], but a seasonally adjusted 0.6 percent
quarter-on-quarter fall showed the Czech economy heading for
recession.
In Hungary, the economy shrank 2.0 percent on the year. This
was deeper than expected in the worst figures since 1996
[], while inflation slowed to 3.1 percent in
January, compared with a 3.3 percent forecast. []
Poland's finance minister was quoted as saying economic
growth could undershoot even the government's most pessimistic
scenario of 1.7 percent this year. []
Germany, one of the region's main trading partners, posted
its worst quarterly GDP contraction since 1990, shrinking 2.1
percent quarter-on-quarter at the end of 2008 [].
Worsening economic data has forced central banks to switch
to monetary easing. But some analysts believe the scope for more
rate cuts is limited because of the currencies weakening.
Some dealers say this dilemma is also giving a hand to
currencies as some investors bet now for smaller rate cuts.
"Views about monetary policy prospects are split," the
Budapest-based dealer said.
"One camp believes that the central bank cannot really cut
rates further as it needs to defend the forint. The other camp
thinks that there has been a shift in monetary policy."
Bond markets, which have been under pressure from rising
credit default swap (CDS) prices, were mostly quiet on Friday,
also ignoring the data.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 28.578 28.657 +0.28% -6.39%
Polish zloty <EURPLN=> 4.633 4.627 -0.13% -11.18%
Hungarian forint <EURHUF=> 297.47 298.93 +0.49% -11.4%
Croatian kuna <EURHRK=> 7.42 7.43 +0.13% -0.74%
Romanian leu <EURRON=> 4.293 4.286 -0.16% -6.49%
Serbian dinar <EURRSD=> 93.95 93.24 -0.76% -4.76%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR 0 basis points to 135bps over bmk*
4-yr T-bond CZ4YT=RR +30 basis points to +162bps over bmk*
8-yr T-bond CZ8YT=RR -4 basis points to +144bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -2 basis points to +405bps over bmk*
5-yr T-bond PL5YT=RR -4 basis points to +338bps over bmk*
10-yr T-bond PL10YT=RR -4 basis points to +299bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -3 basis points to +954bps over bmk*
5-yr T-bond HU5YT=RR +46 basis points to +846bps over bmk*
10-yr T-bond HU10YT=RR +2 basis points to +679bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1227 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, Writing by Marius Zaharia;
Editing by Stephen Nisbet)
