* Currencies firmer on GDP data
* Stocks boosted by Portuguese and Spanish austerity moves
* Regional sentiment still fragile
BUDAPEST, May 13 (Reuters) - Central European currencies
opened firmer on Thursday as a rebound from last week's falls
continued following better than expected economic growth data in
the region.
Equities also continued to rise after austerity measures
announced by Portugal and Spain further eased concerns over
Europe's debt crisis, but dealers and analysts said the mood in
financial markets and risk appetite would remain fragile.
"The sentiment ... will be a function of equity market
performance and potential one-off news related to the euro zone
fiscal issues," Hungary's CIB Bank said in a note on the region.
On Wednesday the recovery of assets in the region was
partially driven by first-quarter gross domestic product figures
indicating that recovery was under way.
The region's most liquid currencies, the zloty <EURPLN=> and
the forint <EURHUF=>, continue to lead gains.
The zloty firmed 1.1 percent against the euro by 0715 GMT to
3.941, staying on the firm side of the key 4.0 level, while the
forint gained 0.6 percent to 271.6. The Czech crown <EURCZK=>
firmed 0.4 percent, and Romania's leu <EURRON=> 0.1 percent.
The region's stock markets also continued to rise, tracking
Asian and Western European equities, though the pace of the
recovery slowed relative to early this week.
Romania's <> main equity index firmed 2.5 percent by
0730 GMT, Hungary's <> rose 1.5 percent, while Warsaw's
<> and Prague's <> gained 0.4 percent.
The leu underperformed regional peers.
"We believe the pressure from a new round of fiscal
tightening rules added to an ongoing growth underperformance
will allow the National Bank of Romania to cut rates further, in
a more aggressive way," said Citigroup analyst Luis Costa in a
note.
"On the EURRON front, the story is not that straightforward,
as potential headwinds in the banking sector (20 percent owned
by Greek banks) could well derail the still feeble recovery
process," he said.
In a separate note, Citigroup's Eszter Gargyan said
Hungary's central bank may take a pause in its interest rate
cuts due to the rise in market volatility in the past month and
risks to fiscal policy under the country's incoming government.
A Hungarian currency dealer said a firming of the forint to
beyond 270 against the euro could open the way for bigger gains.
"A move towards 260 is possible then," the dealer said.
---------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.346 25.437 +0.36% +3.83%
Polish zloty <EURPLN=> 3.941 3.984 +1.09% +4.14%
Hungarian forint <EURHUF=> 271.63 273.31 +0.62% -0.47%
Croatian kuna <EURHRK=> 7.255 7.254 -0.01% +0.75%
Romanian leu <EURRON=> 4.168 4.173 +0.12% +1.67%
Serbian dinar <EURRSD=> 9.92 99.897 -0.02% -4.04%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +6 basis points to +101bps over bmk*
7-yr T-bond CZ7YT=RR +5 basis points to +100bps over bmk*
10-yr T-bond CZ9YT=RR +1 basis points to +89bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 0915 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 bureaux, writing by Jason Hovet/Sandor
Peto; Editing by Kevin Liffey)
