* Romanian leu stronger, dealers suspect cbank help
* Zloty falls back to 1-week low, other FX steady
* Polish retail sales rise, Hungary sales plunge
* Polish 10-yr bond yields dip after auction
(Adds details, fresh quotes, updates prices)
By Jason Hovet and Marius Zaharia
PRAGUE/BUCHAREST, Sept 23 (Reuters) - Romania's leu rose to
three-week highs on Wednesday, extending gains since getting
approval for its next IMF loan tranche while some dealers
speculated the central bank was intervening.
The unit outperformed its neighbours in central Europe,
where the Polish zloty hit a one-week low on the back of
expectations of a big corporate dividend payout, while other
currencies were stuck in recent ranges.
"The central bank sold up to 100 million euros today through
commercial banks to warn IMF money will continue to be used to
defend leu stability," one dealer said.
Others also said the bank may have been intervening. The
central bank declined to comment. The leu <EURRON=> edged up 0.3
percent.
Polish bonds yields dipped some 5 basis points at the long
end of the curve after the finance ministry sold all 2 billion
zlotys of bonds on offer at a tender and an official hinted at
possible cuts in fourth quarter supply. []
Deputy Finance Minister Dominik Radziwill said Poland may
issue up to $500 million in yen-denominated bonds in October,
possibly adding to plans for a bond in euros to take some of the
strain off domestic issuance [].
In Poland, the zloty fell 0.8 percent to bid at 4.195 to the
euro by 1335 GMT, after trading as low as 4.2080 earlier.
Shareholders of Poland's largest insurer PZU are set to vote
on a dividend payout on Friday, with markets worried the
expected 12 billion zloty figure will hit bond prices as the
company will be forced to sell treasuries to raise cash.
BUDGET TALKS
A rally for emerging assets since March has started to peter
out and the region's governments are now grappling with widening
fiscal gaps and unemployment creeps up, despite signs their
economies are emerging from the crisis.
The Czech crown <EURCZK=> was a shade weaker at 25.204 to
the euro as political parties met interim Prime Minister Jan
Fischer over the 2010 budget draft ahead of a parliamentary
debate on Thursday. []
A Czech party leader said a deal was possible over the
approval of austerity measures aimed at cutting the budget
deficit next year [].
The economic crisis has crushed growth in central Europe
with only Poland avoiding recession. But analysts say more pain
will be felt as unemployment tops out in the coming quarters,
denting consumer demand.
Polish retail sales rose less than expected in August, while
Hungary's July sales showed a sharp drop after a VAT tax rise
came into effect []. The Hungarian forint <EURHUF=>
was steady at 271.26 to the euro, while bond markets were quiet,
gearing up for a government bond auction on Thursday.
The state debt agency AKK has raised its offer to 47 billion
forints from 42 billion offered at its previous tender.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.204 25.12 -0.33% +6.15%
Polish zloty <EURPLN=> 4.195 4.162 -0.79% -1.91%
Hungarian forint <EURHUF=> 271.26 271.11 -0.06% -2.84%
Croatian kuna <EURHRK=> 7.287 7.275 -0.16% +1.07%
Romanian leu <EURRON=> 4.227 4.241 +0.33% -5.03%
Serbian dinar <EURRSD=> 93.157 93.267 +0.12% -3.95%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +11 basis points to 202bps over bmk*
7-yr T-bond CZ7YT=RR +1 basis points to +171bps over bmk*
10-yr T-bond CZ10YT=RR -2 basis points to +166bps over
bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR 0 basis points to +375bps over bmk*
5-yr T-bond PL5YT=RR -3 basis points to +334bps over bmk*
10-yr T-bond PL10YT=RR -7 basis points to +276bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -6 basis points to +592bps over bmk*
5-yr T-bond HU5YT=RR -16 basis points to +509bps over bmk*
10-yr T-bond HU10YT=RR -7 basis points to +434bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1635 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 and
Marius Zaharia, editing by Patrick Graham)
