(Updates prices, adds crown fall)
By Jason Hovet
PRAGUE, Sept 19 (Reuters) - Emerging European currencies and
stock markets pushed higher on Friday, with Poland's zloty and
Hungary's forint leading the way, propelled by U.S. plans to
clean up the toxic assets that have jammed credit markets.
The zloty <EURPLN=> rose nearly 1 percent before easing to
3.17 to the euro by 1121 GMT, or 0.6 percent up from Thursday's
domestic close.
Market watchers said Warsaw's declaration of a drive over
the next three years to prepare to join the euro could help it
break away from its regional peers if global turmoil subsides.
"A rebound in stock markets and an improvement in the
overall mood is driving the zloty," said Jan Koprowski, a
currency dealer at BNP Paribas in Warsaw. "If the market calms,
it is positive for the zloty."
Regional stock markets jumped on Friday led by a 9 percent
rise in Prague following the best day in six years for U.S.
stocks, which soared on news U.S. policymakers were working on a
plan to clean up mortgage-related debt.
Other currencies followed the rally, including the forint
<EURHUF=> with a gain of 0.6 percent to 240.79 per euro, and
Romania's leu <EURRON=> added 0.2 percent to 3.658 to the euro,
although the lower-yielding Czech crown suffered from a pick-up
in risk appetite to fall more than 1 percent.
The credit crunch reached new levels this week, starting
with the bankruptcy protection filing of Lehman Brothers and
moving to a U.S. bailout of insurance giant AIG.
Emerging markets have swung widely, causing havoc in Russia,
where officials shut the bourse on Wednesday and Thursday.
But central Europe, whose economies are still playing
catch-up and where lending habits remain conservative, has been
somewhat insulated from global credit concerns, although share
prices of the region's real estate firms have been punished.
The Czech, Hungarian, Polish and Romanian currencies have
fallen back in recent weeks due to slower economic growth in
Europe and scaled back expectations for higher interest rates.
But the zloty has surged since officials said it could
qualify for the euro in 2011 and likely join a year later.
Analysts say the central bank may hike rates to cut
inflation and brace the economy for a spell in the pre-euro
ERM-2 currency grid, which could begin by early 2009.
That has hit the short end of Poland's bond yield curve, to
the benefit of the long end, but weaker than expected industrial
output data on Thursday tamed some rate hike expectations.
In other trade, the crown <EURCZK=> fell 1.1 percent to
24.27 to the euro in illiquid trade.
"Investors are going back into riskier assets, and are
therefore cutting their positions in the Czech crown," said
Ulrich Leuchtmann, head of foreign exchange research at
Commerzbank in Frankfurt.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2008
Czech crown <EURCZK=> 24.272 24.019 -1.05% +8.4%
Polish zloty <EURPLN=> 3.317 3.337 +0.6% +7.87%
Hungarian forint <EURHUF=> 240.790 242.300 +0.62% +4.77%
Croatian kuna <EURHRK=> 7.106 7.102 -0.06% +3.01%
Romanian leu <EURRON=> 3.658 3.665 +0.19% -2.17%
Serbian dinar <EURRSD=> 76.410 76.287 -0.16% +2.98%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -17 basis points to -1bps over bmk*
5-yr T-bond CZ5YT=RR -17 basis points to -2bps over bmk*
10-yr T-bond CZ9YT=RR -12 basis points to +18bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -27 basis points to +241bps over bmk*
5-yr T-bond PL5YT=RR -17 basis points to +197bps over bmk*
10-yr T-bond PL10YT=RR -12 basis points to +165bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -20 basis points to +529bps over bmk*
5-yr T-bond HU5YT=RR -17 basis points to +493bps over bmk*
10-yr T-bond HU10YT=RR -17 basis points to +386bps over bmk*
*Benchmark is German bond equivalent.
All currency data taken from Reuters at 1321 CET.
All bond data taken from Reuters at 1030 CET.
Currency percent change calculated from the daily domestic
close at 1500 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet; Editing
by Ruth Pitchford)
