* Currencies ease as dlr rebounds, zloty firms slightly
* Romania postpones euro bond, sees 10 pct cap on yields
* IMF scrutinises Hungary deficit, opposition sees rise
(Recasts with new prices, comments)
BUDAPEST, Nov 12 (Reuters) - Central European currencies
eased and equities were mixed on Thursday as concerns over
budget deficits in the regions' countries kept regional markets
fragile.
The overall prospects of the region's heavily export-reliant
economies and currencies are improving as indicated by euro zone
industrial output and U.S. payroll data.
But a move of the U.S. dollar through the key 1.5 line
versus the euro on Thursday and a retreat of emerging market
equities after rallies in the past weeks indicate short-term
uncertainty over risk appetite, traders said.
The region's currencies are likely to remain volatile in the
rest of the year and sensitive to negative domestic economic
news, dealers said.
Hungary's forint <EURHUF=D2> shed 0.2 percent against the
euro by 1508 GMT, while the Czech crown <EURCZK=> and the
Romanian leu <EURRON=> eased 0.2 percent.
The zloty <EURPLN=> of Poland, which has escaped recession
and is seen the quickest to recover in the region, firmed 0.1
percent, while Polish government bonds moved sideways.
The zloty led the region's rebound from last week's lows and
analysts said September current account data published earlier
this week could continue to lend the unit support.
A Polish finance ministry official said industrial output
was expected to grow more than 3 percent year-on-year in the
third quarter despite a likely fall in October. []
"We have a positive stance in terms of the zloty, but in the
short term investors are likely to be cautious, watching fiscal
plans for 2010," said Barclays Capital analyst Koon Chow.
FISCAL CONCERNS
Third quarter GDP figures to be published in the Czech
Republic and Hungary on Friday are expected to show slower
annual contraction, while Romanian data is seen showing
continued deep recession.
Recent domestic data suggested that the region's economies
may be past the worst of the crisis, but investors are still
worried that high budget and external deficits and debt can keep
some of them more vulnerable than other emerging markets.
Romania's finance ministry said on Thursday that it
postponed a planned euro bond until 2010 and that it would not
accept yields above 10 percent at domestic debt tenders.
The International Monetary Fund (IMF) has halted talks with
Romania over an aid tranche originally planned for December due
to the country's government crisis, and analysts said Romania
may be forced into accepting higher yields.[]
The central bank's intervention policy has helped the leu
stay relatively stable despite the political woes.
But analysts have said the leu and the forint could firm
less in the next year than the crown and the zloty, and their
near-term prospects were also more uncertain.
Local daily Nepszabadsag reported an ongoing review of
Hungary's progress on meeting the terms of its $25.1 billion
IMF-led bailout found that the country was likely to overshoot
its 2009 budget deficit target. [] []
Czech traders on Friday will also watch the minutes of last
week's meeting where the central bank decided in a narrow vote
not to cut rates. Some analysts see room for the crown to firm
to 25 versus the euro, but others are sceptical.
"We are more or less at levels (from before) verbal
interventions (by the central bank in September to stem crown
strength), so this is an important psychological factor against
further gains," a Prague dealer said.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.51 25.454 -0.22% +4.87%
Polish zloty <EURPLN=> 4.131 4.135 +0.1% -0.39%
Hungarian forint <EURHUF=> 270.28 269.48 -0.3% -2.49%
Croatian kuna <EURHRK=> 7.294 7.284 -0.14% +0.97%
Romanian leu <EURRON=> 4.297 4.29 -0.16% -6.58%
Serbian dinar <EURRSD=> 94.14 94.058 -0.09% -4.95%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -5 basis points to 105bps over bmk*
7-yr T-bond CZ7YT=RR -4 basis points to +105bps over bmk*
10-yr T-bond CZ10YT=RR -2 basis points to +85bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +2 basis points to +368bps over bmk*
5-yr T-bond PL5YT=RR 0 basis points to +320bps over bmk*
10-yr T-bond PL10YT=RR -2 basis points to +276bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +1 basis points to +518bps over bmk*
5-yr T-bond HU5YT=RR 0 basis points to +454bps over bmk*
10-yr T-bond HU10YT=RR -2 basis points to +393bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1608 CET.
Currency percent change calculated from the daily domestic
close at 1700 GMT.
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(Reporting by Reuters bureaus, writing by Gergely
Szakacs/Sandor Peto; Editing by Andy Bruce)
