* FX off lows, under pressure as investors cut risk exposure
* Stocks lose around 1 percent, track peers
* Czech bonds firmer, Polish stable before CPI
(Adds bond prices, more on stocks)
By Jason Hovet
PRAGUE, March 15 (Reuters) - Central European currencies
recovered some ground in morning trade on Tuesday but remained
under pressure after an overnight drop as Japan's nuclear crisis
drove selling of riskier assets globally. []
Stock markets in emerging Europe lost as much as 2.4
percent. The Polish zloty led currency losses, bid down 0.5
percent and just off a 3-1/2 month low hit before the opening.
"Fear of further damage at the Japanese nuclear plants is
causing investors to close their positions on emerging markets,"
said Robert Kesicki, a Warsaw-based FX dealer at Kredyt Bank.
"Apart from the zloty, the forint is also weakening. I think
the zloty will stay in a 4.02-4.10 per euro range today."
By 1032 GMT, the zloty was bid at 4.057 to the euro. In
Hungary, where local markets are closed, the forint <EURHUF=>
lost 0.3 percent from Monday's European close.
The Czech crown <EURCZK=>, a usual safe haven play within
emerging Europe, and Romanian leu <EURRON=> lost 0.1 percent.
Warsaw stocks <> fell about 2 percent, led by copper
miner KGHM <KGHM.WA> as commodity prices dropped.
ADDS TO PRESSURE
The market and economic uncertainty following the Japanese
earthquake has added to the pressure seen on central European
currencies in recent weeks as the outlook for monetary policy
tightening across the region blurs. []
[]
While Czech bond yields edged mostly lower on Tuesday,
expectations the bank would rush to begin monetary tightening
were dealt a blow on Monday with news that Kamil Janacek, one of
a minority group on the central bank's board advocating a rate
rise, would miss the meeting this month. []
In Poland, bonds were stable ahead of inflation data in the
afternoon, and after firming on Monday on news the finance
ministry is looking to carry out interest rate swap operations
in which it would receive fixed-rate paper. []
The zloty, due to a cap in yields, weakened on the news.
"It seems as if the Polish zloty could be heading above 4.00
against the euro more permanently on the back of a general
worsening of Polish fundamentals -- especially concerns over
Polish public finances," Danske Bank said.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2011
Czech crown <EURCZK=> 24.338 24.319 -0.08% +2.72%
Polish zloty <EURPLN=> 4.057 4.037 -0.49% -2.44%
Hungarian forint <EURHUF=> 272.77 272.04 -0.27% +1.91%
Croatian kuna <EURHRK=> 7.386 7.386 0% -0.08%
Romanian leu <EURRON=> 4.184 4.179 -0.12% +1.17%
Serbian dinar <EURRSD=> 102.43 102.49 +0.06% +3.41%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +16 basis points to 24bps over bmk*
7-yr T-bond CZ7YT=RR +6 basis points to +71bps over bmk*
10-yr T-bond CZ9YT=RR +5 basis points to +75bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +14 basis points to +356bps over bmk*
5-yr T-bond PL5YT=RR +14 basis points to +346bps over bmk*
10-yr T-bond PL10YT=RR +12 basis points to +316bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +5 basis points to +492bps over bmk*
5-yr T-bond HU5YT=RR +10 basis points to +474bps over bmk*
10-yr T-bond HU10YT=RR +5 basis points to +413bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1133 CET.
Currency percent change calculated from the daily domestic
close at 1700 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet, editing
by Patrick Graham)
