* Currencies pare losses after dollar eases
* Czech bond yields fall at 10-year auction
* Market eyes Hungary bond tender on Thurs
* Polish euro hopes suffer blow
* IMF says emerging Europe to shrink 3.75 pct
(Adds details, updates prices)
By Dagmara Leszkowicz and Gergely Szakacs
WARSAW/BUDAPEST, April 22 (Reuters) - Central European
currencies pared intraday losses versus the euro late on
Wednesday and a 10-year Czech bond sale drew healthy demand in
response to government plans to issue a eurobond.
The Czech Finance Ministry sold 7.78 billion crowns ($372.4
million) worth of the 5.00 percent coupon government bonds
<CZ1002471=> to investors, and took 1.5 billion onto its books.
It had offered 7 billion crowns in two auction rounds, and
demand reached 17.5 billion. The average yield dropped to 5.479
percent from 5.619 percent in a March auction. []
Falling spreads on Czech debt have opened a window for the
Czechs to look again at an eurobond issue, Finance Minister
Miroslav Kalousek told Reuters on Tuesday, although no official
plans have yet been announced. []
The crown <EURCZK=> rose 0.33 percent versus the euro,
erasing earlier losses to trade at 26.884 at 1508 GMT.
Most central European currencies pared earlier losses or
turned positive on the back of gains in the euro <EUR=>.
In Hungary, the market was gearing up for the first bond
auction in months on Thursday where the debt agency AKK will
offer 5 billion forints worth each of 3-, 5- and 10-year
government bonds. []
Hungary has not sold government bonds since October except
for a pilot tender in February, but last week the AKK said it
would resume regular bond auctions every other week starting
April 23 <HUISSUE>.
The forint <EURHUF=> rose 0.4 percent to the euro but
traders said the market lacked a clear direction.
BLOW TO POLISH EURO HOPES
Poland's zloty <EURPLN=> was down 0.2 percent after the
regional heavyweight's ambitious plan to adopt the single
currency suffered a major blow on Wednesday when it conceded the
deficit would likely exceed the European Union ceiling of 3
percent of gross domestic product this year.
Statistics office showed the deficit at 3.9 percent of GDP
last year, well above the threshold set by the EU's Maastricht
treaty for euro candidates and members and also above a previous
government estimate of 2.7 percent. []
In Romania, the leu <EURRON=> moved in tight ranges, lacking
a clear direction in the absence of local news.
"International developments remain key," ING Bank said in a
research note.
"The leu could continue to weaken in the coming sessions but
active price action could slow down around 4.30 per euro as
market players may hesitate to trade past these levels that have
seemed heavily guarded by the central bank in recent months."
"Given the size of the losses recorded by the leu in the
last weeks, central bank opposition in the coming sessions is
likely."
Dealers have said they suspected repeated central bank
covert interventions to defend the leu, mostly since the start
of the year up until last month, when Romania secured a 20
billion euro IMF-led deal.
Separately, on Wednesday the IMF said the world economy had
fallen into a severe recession and emerging European economies
could contract by around 3.75 percent this year and grow by just
1 percent in 2010. []
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26.884 26.972 +0.33% -0.49%
Polish zloty <EURPLN=> 4.413 4.404 -0.2% -6.75%
Hungarian forint <EURHUF=> 297.25 298.5 +0.42% -11.34%
Croatian kuna <EURHRK=> 7.379 7.391 +0.16% -0.19%
Romanian leu <EURRON=> 4.243 4.235 -0.19% -5.39%
Serbian dinar <EURRSD=> 93.72 93.217 -0.54% -4.52%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -35 basis points to 155bps over bmk*
4-yr T-bond CZ4YT=RR -13 basis points to +185bps over bmk*
8-yr T-bond CZ8YT=RR -4 basis points to +287bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -32 basis points to +891bps over bmk*
5-yr T-bond HU5YT=RR -68 basis points to +831bps over bmk*
10-yr T-bond HU10YT=RR -54 basis points to +745bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1708 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
For related news and prices, click on the codes in brackets: All
emerging market news []
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(Reporting by Reuters bureaus, writing by Dagmara Leszkowicz,
editing by Victoria Main)
