* Romania leu leads gains as FX get bounce
* Polish net CPI data due, debt markets await Wed tender
(Adds details, bonds)
By Jason Hovet
PRAGUE, Sept 22 (Reuters) - Central European currencies
edged up on Tuesday, boosted by a weakening dollar and equity
gains in the region, with the leu leading gains after the IMF
approved Romania's next loan tranche.
The International Monetary Fund approved a further $2.72
billion for Romania late on Monday, lending support to the
underperforming currency. The leu <EURRON=> bid up 0.3 percent
at 4.254 to the euro by 0944 GMT. []
"The IMF's approval of the next loan tranche is certainly
the kind of news that the leu needs to support it," said Simon
Quijano-Evans, strategist at Cheuvreux. "We continue to see the
RON as undervalued and look for EUR/RON to average 4.05 in 2010
versus 4.21 this year."
The leu has lagged the rebound in central European
currencies seen since March, and has dropped 1.9 percent since
June while the Polish zloty gained more than 7 percent and the
Hungarian forint almost 3 percent.
Romania followed Hungary earlier this year in securing an
IMF/European Union aid package to plug financing gaps as the
economic crisis tore into the region.
Like Hungary, Romania's central bank has held back on
interest rate cuts, leaving rates at the highest in the EU at
8.5 percent, although the IMF on Monday said more stability in
financial markets and declining inflation could provide room for
monetary easing.
BOTTOM OF CYCLE
Poland and the Czech Republic are mostly seen at the end of
their easing cycles. The Czech crown was flat at 25.125 per euro
before a central bank meeting this week that all analysts polled
by Reuters said would see no change to rates, already at a
record low of 1.25 percent.
In Poland, the zloty was up a notch at 4.154 to the euro,
with markets looking to a net inflation release due at 1200 GMT,
while bonds there were steady.
Expectations of an end to interest rate cuts and news the
government central budget gap will double next year have dented
debt markets, with the yield on the 10-year jumping around 20
basis points this month. []
"The publication of core inflation for August is
particularly likely to move markets if the data comes in above
expectations," Commerzbank analysts said in a note.
Dealers also said debt markets were mainly looking toward
Wednesday's bond tender where the Finance Ministry will offer up
to 2 billion zlotys in long-dated WS0922 bonds maturing in 2022.
Central European stocks rose after pulling back from
multi-month highs in the previous session, with Bucharest
<> adding 1.1 percent and Warsaw <> 3 percent.
Hungary's forint <EURHUF=> gained 0.2 percent to 270.98.
Dealers said currencies found support from euro/dollar,
which hit a one-year high on Tuesday. The rate is often a
reference for central European currencies.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.125 25.118 -0.03% +6.48%
Polish zloty <EURPLN=> 4.154 4.159 +0.12% -0.94%
Hungarian forint <EURHUF=> 271.06 271.36 +0.11% -2.77%
Croatian kuna <EURHRK=> 7.283 7.282 -0.01% +1.13%
Romanian leu <EURRON=> 4.254 4.265 +0.26% -5.63%
Serbian dinar <EURRSD=> 93.21 93.18 -0.03% -4%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -1 basis points to 190bps over bmk*
7-yr T-bond CZ7YT=RR +1 basis points to +171bps over bmk*
10-yr T-bond CZ10YT=RR -2 basis points to +166bps over
bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -130 basis points to +372bps over bmk*
5-yr T-bond PL5YT=RR -3 basis points to +336bps over bmk*
10-yr T-bond PL10YT=RR -3 basis points to +281bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -11 basis points to +597bps over bmk*
5-yr T-bond HU5YT=RR -9 basis points to +524bps over bmk*
10-yr T-bond HU10YT=RR -18 basis points to +440bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1147 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 []
Spot FX rates
Eastern Europe spot FX <EEFX=> Middle East spot FX <MEFX=>
Asia spot FX <ASIAFX=> Latin America spot FX <LATAMFX=>
Other news and reports
World central bank news [] Economic Data Guide <ECONGUIDE>
Official rates [] Emerging Diary []
Top events [] Diaries [] Diaries Index []
(Reporting by Reuters bureaus, writing by Jason Hovet, editing
by Stephen Nisbet)
