* FX, stocks move on stronger ground, bonds mixed
* Polish Q1 GDP shows growth, bucks CEE trend
* Currencies down on week, pressure seen still
(Updates throughout)
PRAGUE, May 29 (Reuters) - Investors seeking higher-yielding
and riskier assets lifted the value of central European
currencies against the euro on Friday, with Hungary's forint and
Poland's zloty among the region's biggest gainers.
Stock markets in central Europe, which have jumped more than
30 percent since March, also mostly rose on Friday, tracking
wider stock gains after signs of improving economic demand
emerged in the United States and Japan. []
The zloty rose after Polish data showed the country has
avoided the regionwide slide into recession, recording first
quarter economic growth of 0.8 percent year-on-year.
This was slightly below estimates, but in sharp contrast to
deep falls in neighbours like Hungary or the Czech Republic.
"The data confirms the economy is slowing, a trend already
visible in the fourth quarter," said Jaroslaw Janecki, chief
economist in Warsaw for Societe Generale.
An aide to Prime Minister Donald Tusk told Reuters the
government will cut the growth estimate in the 2009 budget to 0
to 0.5 percent growth from 3.7 percent. []
The zloty <EURPLN=> was up 0.7 percent by 1420 GMT, off
earlier highs to bid at 4.493 to the euro.
Hungary's forint <EURHUF=> was 1.1 percent stronger than
Thursday's domestic close at 283.1. The Czech crown <EURCZK=>
was flat and the Romanian leu <EURRON=> edged up 0.2 percent.
PRESSURE STAYING
The zloty has shown some of the widest swings of any central
European currencies this year, nearing its all-time low in
February before shooting up as much as 17 percent to 4.225 per
euro by mid-April.
"External factors will remain key drivers for the zloty in
the current financial market context," Societe Generale said in
a weekly note.
Dealers had said on Thursday the Polish government had been
trading directly with European Union funds on currency markets,
helping defend the zloty at around 4.5 to the euro.
[]
Early Czech industrial data for April out on Friday showed a
23.2 percent year-on-year fall, returning to near the record
pace of decline seen early this year, and adding to speculation
the central could cut interest rates. []
Government budget deficits have widened as central Europe's
economies get crushed by a fall in western demand for their
goods, which has hit employment in the region's factories.
Investors were also watching developments in the Baltics,
where currency devaluations, which analysts mostly say is
unlikely this year, could pile on pressure in central Europe.
Baltic currencies have mostly lost around 1-2 percent in the
past week led by the zloty, and strategists say this should
continue depending on risk sentiment.
"The weakening... was exacerbated by bad economic news in the
Baltic countries, which led to fresh speculation of
devaluation," Societe Generale said in its note.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26.852 26.854 +0.01% -0.37%
Polish zloty <EURPLN=> 4.493 4.525 +0.71% -8.41%
Hungarian forint <EURHUF=> 283.1 286.32 +1.14% -6.91%
Croatian kuna <EURHRK=> 7.361 7.33 -0.42% +0.05%
Romanian leu <EURRON=> 4.184 4.194 +0.24% -4.05%
Serbian dinar <EURRSD=> 94.785 94.477 -0.32% -5.6%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +39 basis points to +150bps over bmk*
4-yr T-bond CZ4YT=RR +45 basis points to +185bps over bmk*
8-yr T-bond CZ8YT=RR +17 basis points to +270bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -11 basis points to +836bps over bmk*
5-yr T-bond HU5YT=RR -5 basis points to +751bps over bmk*
10-yr T-bond HU10YT=RR -6 basis points to +636bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1623 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 Richard Hubbard)
