* FX mixed as ECB disappoints
* Forint firms on rate hike talks
* Hungary sells more debt than planned, yields jump
(Updates throughout)
By Marius Zaharia and Dagmara Leszkowicz
BUCHAREST/WARSAW, Dec 2 (Reuters) - Some Emerging European
currencies trimmed gains as investors digested comments from the
head of the European Central Bank on Thursday, while Hungary's
forint firmed on talk of further monetary tightening.
ECB President Jean-Claude Trichet signalled the bank would
continue to buy government bonds, though he made no commitment
to bulk up purchases, disappointing on some market speculation.
An easing of the debt crisis would help the European Union's
eastern members, who tend to suffer as the euro and broader
appetite for risk falls.
"It looks like the market had counted on more liquidity
measures and the president has disappointed investors'
expectations," said one Warsaw-based dealer.
By 1455 GMT the zloty <EURPLN=> was some 0.2 percent up
against the euro.
Hungary's forint <EURHUF=> added some 0.5 percent after its
central bank deputy governor said it monetary tightening would
likely continue after a surprise hike on Monday to prevent
inflation overshooting its target. []
The Czech crown <EURCZK=> was virtually flat to the common
currency, while Romania's leu <EURRON=> was down 0.1 percent.
Hungary's bond yields jumped some 5-7 basis points after
Budapest sold a larger amount of its three, five and 10-year
bonds than planned. Dealers attributed the rise in yields to the
situation on the forex market []
Elsewhere, Romania gave details of its debt issuance plan
for December and analysts said the target looked feasible.
Romania has struggled to issue leu debt at yields it saw as
sustainable in the past few months as doubts about its political
commitment to budget reform prompted investors to push for
higher returns and the finance ministry to cap them.
[]
ROOM TO GAIN
A Reuters poll showed on Thursday economic recovery would
lift currencies in the European Union's eastern wing in 2011 but
that the falls of the past few weeks could resume any time if
the euro zone debt crisis escalates. []
The zloty should lead gains with a rise of some 5.5 percent
over the next 12 months, the poll showed, while the forint is
expected to gain 2.5 percent, only partly offsetting a 3 percent
decline seen this year.
In Poland, a batch of officials spoke about the zloty on
Thursday, with the finance minister saying there was no need to
intervene on the FX market now and the central bank governor
reiterating his view that the unit was sure to appreciate
further. []
Dealers said the comments had limited impact on the market
as they 'balanced' each other out.
Assets gained across the region on Wednesday after Poland,
Hungary and the Czech Republic all posted strong PMI growth,
alleviating some of the fiscal worries in the region and
boosting bets for a steady economic recovery in emerging Europe.
The data added to arguments for the Polish central bank to
start tightening policy, but rate-setters in the Czech Republic
said interest rates were unlikely to rise anytime soon.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25 24.991 -0.04% +5.27%
Polish zloty <EURPLN=> 4 4.007 +0.17% +2.6%
Hungarian forint <EURHUF=> 278.15 279.55 +0.5% -2.8%
Croatian kuna <EURHRK=> 7.408 7.398 -0.13% -1.33%
Romanian leu <EURRON=> 4.298 4.292 -0.14% -1.41%
Serbian dinar <EURRSD=> 107.17 107.18 +0.01% -10.53%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -7 basis points to 93bps over bmk*
7-yr T-bond CZ7YT=RR -2 basis points to +83bps over bmk*
10-yr T-bond CZ9YT=RR +1 basis points to +98bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +8 basis points to +387bps over bmk*
5-yr T-bond PL5YT=RR +5 basis points to +362bps over bmk*
10-yr T-bond PL10YT=RR -1 basis points to +318bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +4 basis points to +689bps over bmk*
5-yr T-bond HU5YT=RR -9 basis points to +620bps over bmk*
10-yr T-bond HU10YT=RR -7 basis points to +533bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1555 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 Marius Zaharia,
editing by Patrick Graham)
