* Currencies mixed as rally on stocks ends
* Political deadlock continues in Hungary
* Romania negotiatied with IMF loan package
(Adds quotes, details, updates prices)
By Dagmara Leszkowicz
WARSAW, March 24 (Reuters) - Emerging Europe currencies gave
up most early gains on Tuesday as a rally in global stocks ran
out of steam, while political uncertainty hung over the region
and Romania edged closer to sealing an IMF aid package.
Market players watched developments in Hungary, where Prime
Minister Ferenc Gyurcsany offered over the weekend to step aside
and give way to a new leader and government to tackle the
economic crisis.
In the Czech Republic, the crown edged lower before a
no-confidence vote against the shaky minority government, and
analysts said the opposition had its best shot yet at toppling
the Prime Minister Topolanek. []
"It is uncertainty which markets do not particularly like,"
said Calyon currency strategist Stuart Bennett. "This is
certainly taking the edge off of what would have been a rally
given the (move) in equities."
The forint <EURHUF=> gained 0.5 percent on the day to 301.1
to the euro by 1109 GMT, and the crown <EURCZK=> fell 0.7
percent to the weak side of 27 per euro. Poland's zloty was up a
touch at 4.54.
In Romania, a source said the country has agreed with the
International Monetary Fund on a budget deficit target of 4.6
percent of gross domestic product for 2009, in an IMF-led loan
package worth 20 billion euros. []
The country would be the third of the region's EU members to
gain an IMF-led deal to ease concerns over financing due to
global credit channels drying up, following Latvia and Hungary
-- which secured a $25 billion aid package last October.
The leu <EURRON=> held steady on Tuesday moving around 4.29
against the euro, in a range it has stuck around for weeks as
details of the expected IMF deal were hammered out. The deal is
expected to be rubber-stamped on Wednesday.
Regional stocks also pared gains on profit taking after
global equities eased from a sharp rally on U.S. plans to mop up
toxic assets from banks.
NEW GOVT?
Hungary's ruling Socialists and Free Democrats had a round
of talks about possible candidates for prime minister late on
Monday and hope to pick a new leader by Thursday with broad
parliamentary support needed for drastic action to save the
recession-hit economy. []
The Socialists also won tentative support from a small
opposition party on Tuesday as talks over a new leader were set
to resume. []
But dealers said global sentiment was likely to prevail in
the short run despite political uncertainty. "The external
environment is supportive, so Hungarian politics is ignored (at
the moment)," one Budapest-based dealer said.
Hungary's economy has suffered under a fall in demand from
the struggling euro zone -- like other central and eastern
European countries that used foreign credit and investment to
fuel strong growth earlier this decade.
Currencies have reversed sharply since record highs just
last summer, with Poland's zloty losing almost 30 percent of its
value against the common currency since July 2008, leading
losses in the region. Over the same period Hungary's forint lost
almost 23 percent and the crown 11 percent.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 27.017 26.821 -0.73% -0.98%
Polish zloty <EURPLN=> 4.54 4.55 +0.22% -9.36%
Hungarian forint <EURHUF=> 301.1 302.7 +0.53% -12.47%
Croatian kuna <EURHRK=> 7.452 7.47 +0.24% -1.17%
Romanian leu <EURRON=> 4.289 4.291 +0.05% -6.4%
Serbian dinar <EURRSD=> 94.61 94.35 -0.27% -5.42%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -22 basis points to 219bps over bmk*
4-yr T-bond CZ4YT=RR -13 basis points to +270bps over bmk*
8-yr T-bond CZ8YT=RR -17 basis points to +322bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -36 basis points to +392bps over bmk*
5-yr T-bond PL5YT=RR -26 basis points to +349bps over bmk*
10-yr T-bond PL10YT=RR -28 basis points to +286bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -25 basis points to +1032bps over bmk*
5-yr T-bond HU5YT=RR -66 basis points to +969bps over bmk*
10-yr T-bond HU10YT=RR -80 basis points to +788bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1210 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 Dagmara Leszkowicz,
editing by Mike Peacock)
