* Forint, zloty recover losses, crown sold vs region
* Hungarian bond yields steady after auction
(Adds bonds, Polish GDP, Serb dinar)
PRAGUE, Jan 28 (Reuters) - The zloty held gains on Thursday
after preliminary data showed the Polish economy grew more than
expected last year, rebounding with the Hungarian forint as
investors scooped up riskier emerging market assets.
Investor demand for Hungarian debt held up at a domestic
bond auction, overcoming some market fears of weaker interest
two days after Budapest's $2 billion 10-year bond issue on
Tuesday.
The forint <EURHUF=> was up 0.5 percent at 271.47 to the
euro by 1211 GMT, recouping losses from Wednesday. Bond yields
were steady after the auction.
Central European stock markets also rose with global peers
after U.S. President Barack Obama unveiled plans to revive the
world's largest economy. [].
The zloty <EURPLN=> added 0.4 percent, holding steady after
preliminary gross domestic product data showed 1.7 percent
year-on-year growth in 2009. [] []
"This data shows that the Polish economy stands out in the
region as far as growth is concerned," said Rafal Benecki,
senior economist at ING Bank Slaski in Warsaw. "This data also
provides good prospects for the budget and the bond market."
The Czech crown <EURCZK=> underperformed, dipping 0.3
percent. Dealers said some investors were using the unit as a
funding currency.
"There was a recommendation ... for selling crowns for the
Romanian leu," a Prague dealer said. "Also the long zloty/crown
trade is still on the cards."
Serbia's dinar <EURRSD=> fell to a new low, losing 0.5
percent to trade at 98.50/euro, with banks citing strong client
demand and a lack of euro liquidity. []
GROWTH, RECOVERY
The zloty has been tipped by strategists as a central
European outperformer this year due to faster economic recovery.
But currencies are seen shaky over the coming months on
fiscal weakness concerns, and as interest rate cuts weigh on
the forint and leu, according to a Reuters poll. <CEEFXPOLL09>
Polish Prime Minister Donald Tusk told the Financial Times
that Poland plans to limit growth in discretionary public
spending to 1 percent annually as part of a fiscal rescue plan.
Poland would reach the 3 percent of GDP deficit level
required to join the euro by 2013, he said, but did not give a
date for adopting the currency. []
Yields on Polish bonds dipped a few basis points on
Thursday, with the 2-year bond <PL2YT=RR> trading below 5
percent for the first time since November this week.
In Romania, the leu <EURRON=> was steady at 4.132 to the
euro, underpinned by IMF plans, announced on Wednesday, to
unlock the country's 20 billion euro aid package.
The IMF opened the way for Romania to receive a 3.3 billion
euro slice of the aid after elections ended a political impasse
and lawmakers approved a 2010 austerity budget. []
Hungary's dollar-denominated bond issue this week signalled
Budapest's plans to come off aid from the International Monetary
Fund this year although further issues are expected to be only
on domestic markets.
Demand for the 50 billion forints in debt on sale in the
domestic market on Thursday was steady compared with auctions
from two weeks ago. []
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 26.254 26.165 -0.34% +0.24%
Polish zloty <EURPLN=> 4.076 4.092 +0.39% +0.69%
Hungarian forint <EURHUF=> 271.47 272.74 +0.47% -0.41%
Croatian kuna <EURHRK=> 7.309 7.322 +0.18% 0%
Romanian leu <EURRON=> 4.132 4.128 -0.1% +2.55%
Serbian dinar <EURRSD=> 98.413 97.94 -0.48% -2.57%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +3 basis points to 97bps over bmk*
7-yr T-bond CZ7YT=RR +5 basis points to +136bps over bmk*
10-yr T-bond CZ10YT=RR -1 basis points to +125bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -3 basis points to +380bps over bmk*
5-yr T-bond PL5YT=RR -1 basis points to +327bps over bmk*
10-yr T-bond PL10YT=RR +1 basis points to +288bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +1 basis points to +544bps over bmk*
5-yr T-bond HU5YT=RR +2 basis points to +501bps over bmk*
10-yr T-bond HU10YT=RR -1 basis points to +450bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1313 CET.
Currency percent change calculated from the daily domestic
close at 1700 GMT.
For related news and prices, click on the codes in brackets: All
emerging market news []
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(Reporting by Reuters bureaus, writing by Jason Hovet; Editing
by Susan Fenton/Ruth Pitchford)
