* Zloty weaker after c.bank leaves rates flat
* U.S. data helps other units rebound from lows
* Hungary sets USD-bonds at about 275 bps over Treasuries
(Updates throughout)
By Jason Hovet and Dagmara Leszkowicz
PRAGUE/WARSAW, Jan 26 (Reuters) - Poland's zloty eased on
Tuesday after the country's central bank left interest rates
unchanged at an all-time low, as expected.
Other currencies in the region were also weaker, with only
Hungary's forint bucking the trend, but managed to trim their
losses after U.S. data boosted global investor sentiment.
Concerns over the world economy rose after China clamped
down on lending and the United States looked to freeze domestic
spending, highlighting fears a global recovery could stall and
drag on central Europe's own revival. []
The ex-communist economies are seen posting a modest rebound
this year after a sharp downturn last year when only Poland
avoided recession. Strategists have said emerging European
markets should extend a rally in the first half of the year.
"Today's meeting (of the Polish Monetary Policy) brought
little news and was neutral for the zloty," said Anders
Svendsen, senior analyst at Nordea.
"Still, the MPC were slightly more upbeat on the economic
outlook and hence we maintain our view that a first (interest
rate) hike will come around June."
Poland's main interest rate stands now at 3.5 percent, after
the last cut delivered in June. The market does not expect the
10-strong MPC to tighten borrowing costs before the second half
of 2010 as economic recovery gathers pace.
By 1512 GMT the zloty <EURPLN=> was down 0.3 percent against
the euro, trading at 4.088. The Czech crown MEURHUF=> was 0.2
percent weaker, while Romania's leu <EURROn=> fell some 0.3
percent against the common currency.
Hungary's forint <EURHUF=> was almost 0.4 percent stronger,
with dealers saying the news on a dollar-denominated bond
issuance could support the FX market.
Hungary has set guidance on its dollar-denominated 10-year
bond at around 275 basis points over U.S. Treasuries. Citiand
Deutsche Bank are lead managers for the deal. [].
"The USD bond issue may have had a positive impact on the
forint but that is really the only factor worth mentioning
today," the dealer said.
Polish bonds were slightly firmer on Tuesday but lacked any
clear sense of direction.
"We're at a kind of crossroads. The market really doesn't
know where to move," said Remigiusz Zalewski, dealer at BRE bank
in Warsaw.
He said politics may provide some impetus in coming days.
The centre-right government is expected to present a fiscal
consolidation plan on Friday.
"This could be a market-moving story," Zalewski said.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26.079 26.02 -0.23% +0.92%
Polish zloty <EURPLN=> 4.088 4.077 -0.27% +0.39%
Hungarian forint <EURHUF=> 271.61 272.6 +0.36% -0.46%
Croatian kuna <EURHRK=> 7.291 7.294 +0.04% +0.25%
Romanian leu <EURRON=> 4.126 4.115 -0.27% +2.7%
Serbian dinar <EURRSD=> 97.66 97.48 -0.18% -1.82%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -4 basis points to 94bps over bmk*
7-yr T-bond CZ7YT=RR -1 basis points to +139bps over bmk*
10-yr T-bond CZ10YT=RR -5 basis points to +126bps over
bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR 0 basis points to +387bps over bmk*
5-yr T-bond PL5YT=RR +1 basis points to +331bps over bmk*
10-yr T-bond PL10YT=RR 0 basis points to +290bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR 0 basis points to +556bps over bmk*
5-yr T-bond HU5YT=RR +1 basis points to +511bps over bmk*
10-yr T-bond HU10YT=RR 0 basis points to +455bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1512 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)
