* Assets regain some ground on euro rebound
* Hungary spending plan helps forint, Ireland woes weigh
* Markets await Polish cbank decision
(Adds new comment, bonds, updates prices)
By Sandor Peto
BUDAPEST, Nov 23 (Reuters) - Currencies in the European
Union's emerging markets regained some ground on Tuesday as
their reference currency the euro rebounded, and investors
digested news of a fresh package of savings measures in Hungary.
Regional markets also awaited a rate decision from the
Polish central bank, while political uncertainty in Ireland
continued to weigh on sentiment.
Hungary's forint <EURHUF=> erased most of its early losses
to bid at 274.44 against the euro at 0953 GMT, still weaker by
about 0.1 percent from Monday.
The Budapest Stock Exchange's main <> index still led
the losses of equity markets in the region, falling one percent,
while Hungarian government bonds moved sideways with yields
staying near the 11-week highs reached on Monday.
Hungary's economy minister Gyorgy Matolcsy said the
government would present a reform package in February 2011
designed to deliver new savings worth 600-800 billion forints
($3.02-$4.03 billion). []
Traders said markets needed more details about the plan.
"Matolcsy's comments helped, we can say, but a promise now
that they will announce structural reforms in February is not
enough," one Budapest-based currency dealer said.
"I don't see a sentiment change in the (region's) markets.
These are natural movements as the dollar has weakened slightly
(against the euro in morning trade)," the dealer added.
POLISH CENTRAL BANK EYED
Hungary's and neighbouring Romania's budget and debt trends
have often made their markets more vulnerable to news about the
euro zone debt crisis than Czech and Polish markets.
Concerns over debt problems in the euro zone including
Ireland continued to dominate trade in the region on Tuesday.
Romania's leu <EURRON=> fell 0.3 percent versus the euro to
4.311, while Poland's zloty fully recovered from morning falls
and traded flat at 3.943.
Most analysts expect Poland's central bank to keep rates on
hold at a record low of 3.5 percent later on Tuesday, but some
economists believe the country could lead a new tightening cycle
in the region. []
"A rate hike could lead to zloty firming, and that could
influence other currencies like the forint... but the extent
would be limited in the current international environment," one
dealer said.
The Czech crown <EURCZK=> extended early gains, firming 0.2
percent to 24.664. Dealers said the pair would stay around the
24.7 level in the near term.
Komercni Banka said a technical analysis showed the crown
should continue to appreciate. The 24.71 support level should
hold and the currency should firm towards 24.35/37, it said.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 24.664 24.723 +0.24% +6.71%
Polish zloty <EURPLN=> 3.943 3.944 +0.03% +4.08%
Hungarian forint <EURHUF=> 274.44 274.25 -0.07% -1.49%
Croatian kuna <EURHRK=> 7.397 7.395 -0.03% -1.19%
Romanian leu <EURRON=> 4.311 4.297 -0.32% -1.71%
Serbian dinar <EURRSD=> 106.83 106.61 -0.21% -10.25%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -3 basis points to 58bps over bmk*
7-yr T-bond CZ7YT=RR +3 basis points to +72bps over bmk*
10-yr T-bond CZ9YT=RR -4 basis points to +86bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +3 basis points to +597bps over bmk*
5-yr T-bond HU5YT=RR +1 basis points to +563bps over bmk*
10-yr T-bond HU10YT=RR +1 basis points to +488bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1053 CET.
Currency percent change calculated from the daily domestic
close at 1700 GMT.
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(Reporting by Reuters bureaus, writing by Sandor Peto; Editing
by Catherine Evans)
