* FX up on stocks rally, IMF says financing needs lower
* Czech c.bank, ECB in focus
* Poland will issue at least 250 mln euros in eurobonds
(Adds fixed income, quote)
By Dagmara Leszkowicz
WARSAW, May 7 (Reuters) - Hungary's forint hit a 4-month
high on Thursday after emerging Europe markets bounced on the
back of a stocks rally and news the IMF was correcting figures
to show smaller financing needs for the hard-hit region.
Markets were looking ahead to a European Central Bank rate
decision, while stocks rallied on reassurances over U.S. banks
from Treasury Secretary Timothy Geithner. []
The forint was also boosted by better industrial output data
for March, while the Czech crown gained 1 percent after posting
a record surplus in March trade and before an expected interest
rate cut on Thursday. []
At 1000 GMT the forint <EURHUF=> was more than 2 percent up
against the euro and the crown <EURCZK=> rose to 26.469.
The International Monetary Fund changed two figures in its
external debt refinancing needs table in the Global Financial
Stability Report released last month, reducing the amount to
which it said the Czech Republic was exposed to only 89 percent
of central bank reserves.
It also cut its figure for Estonia to 132 percent, from 210,
and said it was still in the process of revising the figures.
[]
"The story about the IMF has caused a lot of excitement and
that is moving all the regional (central european) currencies,"
said one London-based FX trader.
"We are not seeing huge volumes though."
Regional stocks jumped, led by a 4 percent rise in Prague.
In Romania the leu <EURRON=> gained more than half a percent,
nearing a 1-month high at 4.12 against the euro.
The central bank there surprised on Wednesday with a 50
basis point rate cut due to economic worries. []
The Polish zloty rose more than 1.7 percent following late
confirmation on Wednesday that the International Monetary Fund
approved a $20.58 billion flexible credit line for Poland,
although dealers said much of the information was already priced
in. []
WAITING GAME
Polish bonds tracked the currency. Earlier the country's
finance ministry said it would issue at least 250 million euros
in eurobonds, but dealers said that had little impact on local
currency bonds. []
Hungary sold more bonds than it had originally offered on
Thursday, continuing regular debt auctions, only restarted last
month after the worsening of the financial crisis paralysed its
debt markets late last year.
Dealers said trade was quieter before the ECB's meeting,
expected to cut rates by a quarter point, with the focus turning
to whether it will announce any unconventional steps to get the
euro zone economy to a growth path. []
Analysts also said investors in the region would eye the
results of stress tests of 19 leading U.S. banks due later on
Thursday. []
"Definitely stress tests in the U.S. together with the ECB
decision are in focus," said one Warsaw-based dealer.
"The results (of the stress tests) and its impact on the
global stocks are likely to affect regional currencies, but I
would expect the region to appreciate slightly further as the
sentiment overall is better."
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26.469 26.755 +1.08% +1.07%
Polish zloty <EURPLN=> 4.319 4.394 +1.74% -4.72%
Hungarian forint <EURHUF=> 277.77 283.86 +2.19% -5.12%
Croatian kuna <EURHRK=> 7.352 7.36 +0.11% +0.18%
Romanian leu <EURRON=> 4.127 4.15 +0.56% -2.73%
Serbian dinar <EURRSD=> 95.05 95.035 -0.02% -5.86%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -8 basis points to 163bps over bmk*
4-yr T-bond CZ4YT=RR -23 basis points to +192bps over bmk*
8-yr T-bond CZ8YT=RR -11 basis points to +278bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -16 basis points to +416bps over bmk*
5-yr T-bond PL5YT=RR -9 basis points to +334bps over bmk*
10-yr T-bond PL10YT=RR -10 basis points to +288bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -32 basis points to +837bps over bmk*
5-yr T-bond HU5YT=RR -67 basis points to +762bps over bmk*
10-yr T-bond HU10YT=RR -56 basis points to +652bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1158 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Dagmara Leszkowicz;
editing by Patrick Graham)
