* CEE stocks, forex gets Ireland lift, but crown lags
* Romania debt tender up, cap strategy watched
* Bets weaken for Polish rate rise
(Adds bonds, CDS, updates prices)
PRAGUE, Nov 22 (Reuters) - Emerging European stocks rose on
Monday and the Hungarian forint and Polish zloty led currency
gains in the region after Ireland sought a bailout to help it
through a banking and budget crisis.
Ireland's move calmed market jitters that had weighed on the
region in recent weeks and boosted the euro, central Europe's
main reference currency, but dealers said the lift may be
short-lived.
The focus is still on upcoming central bank meetings in the
region, with Poland first up on Tuesday.
The forint <EURHUF=> rose to its highest in more than two
weeks, gaining 0.6 percent from Friday at 272.47 to the euro,
while the zloty added 0.3 percent to 3.927 per euro by 1044 GMT.
The Romanian leu <EURRON=> was stuck in range, and the Czech
crown <EURCZK=> trailed, dipping almost 0.1 percent and holding
weaker after falling past its 55-day moving average last week.
Central European stock markets followed western peers up
with around a half percent gain.
Dealers said markets should get only a slight boost from the
Irish deal until investors begin to worry about other euro zone
periphery state battling debt like Spain or Portugal.
"For now, after Ireland, things are looking up for the
region," said one trader in Bucharest. "But markets are already
looking for another victim."
Bonds were steady, while prices on 5-year credit default
swaps for Hungary and Romania dipped about 2 basis points. The
two countries have also unnerved investors this year with their
own complicated drives to meet international aid conditions.
Earlier this month Romania's finance ministry had signalled
it may ditch the yield cap it has held at debt auctions since
May, but then rejected all bids for five-year paper last week.
The ministry was due to tender 1-year paper on Monday, and
analysts said it was unclear if it would set a new cap. Buyers
have been demanding higher yields due to uncertainty over
IMF-backed measures to cut the deficit. []
POLAND RATES
Markets were focusing on Poland, whose central bank begins a
two-day rate setting meeting on Tuesday. Polish net inflation
data is due out in the afternoon on Monday, with the market
forecasting a rate of 1.2 percent. <ECONPL>
"Should the figure not come in well above expectations, we
assume that the zloty will come under renewed pressure,"
Commerzbank said.
The market has scaled back bets that the 10-strong Polish
Monetary Policy Council will kick off a tightening cycle this
month after comments from policymakers suggested there may not
be a majority to back a rate increase. []
A Reuters poll showed 10 of 18 analysts forecast no change
in the bank's main rate -- now at a record low of 3.5 percent --
while the rest expected a 25 basis point rise. []
Analysts still think Poland will be the first in central
Europe to begin reversing from a course of loosening interest
rates to fight off recession, with Hungary seen as second in
line, but they think the pace of tightening priced in by markets
was overdone.
"FRA (forward rate agreements) seem still to be over-pricing
monetary tightening which could continue to weigh on PLN this
week," RBC said on Monday.
"However, we would recommend selling EUR/PLN on any move
higher post the MPC meeting or buying PLN/HUF, which already
appears to contain some relative value."
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 24.655 24.646 -0.04% +6.75%
Polish zloty <EURPLN=> 3.927 3.939 +0.31% +4.51%
Hungarian forint <EURHUF=> 272.47 274.05 +0.58% -0.78%
Croatian kuna <EURHRK=> 7.394 7.371 -0.31% -1.15%
Romanian leu <EURRON=> 4.294 4.292 -0.05% -1.32%
Serbian dinar <EURRSD=> 106.63 106.59 -0.04% -10.08%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +3 basis points to 65bps over bmk*
7-yr T-bond CZ7YT=RR 0 basis points to +73bps over bmk*
10-yr T-bond CZ9YT=RR +1 basis points to +92bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +4 basis points to +360bps over bmk*
5-yr T-bond PL5YT=RR -1 basis points to +347bps over bmk*
10-yr T-bond PL10YT=RR +1 basis points to +318bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +2 basis points to +570bps over bmk*
5-yr T-bond HU5YT=RR 0 basis points to +532bps over bmk*
10-yr T-bond HU10YT=RR +5 basis points to +464bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1145 CET.
Currency percent change calculated from the daily domestic
close at 1700 GMT.
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emerging market news []
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(Reporting by Reuters bureaus, writing by Jason Hovet; Editing
by Hugh Lawson)
