* Assets in region rebound on G20 hopes
* Czech, Polish debt auctions help
* Zloty firms on central bank comments on options
* Crown inches up, Czechs get closer to a deal on new govt
(Recasts with new comments, prices.)
By Marius Zaharia and Sandor Peto
BUCHAREST/BUDAPEST, April 1 (Reuters) - Central European
currencies rebounded on Wednesday after successful debt auctions
and also helped by hopes that the leading economies of the world
will act together to find a way out of the global crisis.
U.S. President Barack Obama urged coordinated Group of 20
action in London, denying rifts between leading economies, and
said there was "complete concurrence" that emerging economies
needed more resources to help them weather the storm.
(For details please double click on [])
Currencies and bonds firmed, and stocks rose in the region,
even though western European equity markets posted losses.
"The entire region got an enormous boost after Obama said
emerging markets must be offered assistance," one Budapest-based
government bond trader said.
Central European currencies have fallen sharply since the
summer of 2008 as the global crisis hit regional economies which
rely on exports and foreign financing, and central banks have
cut interest rates to help their economies.
The Polish zloty <EURPLN=> led the firming on Wednesday,
gaining 1.55 percent against the euro by 1400 GMT to 4.572. The
Czech crown <EURCZK=> strengthened 0.63 percent to bid at 27.19,
while the Hungarian forint firmed 0.68 percent to 304.75.
The zloty was supported by central bank (NBP) comments on
the expiry of currency options held by Polish firms, said Ernest
Pytlarczyk, head of financial market research at BRE in Warsaw.
"Yesterday vice-governor (Witold) Kozinski said the FX
options were extremely important for the zloty and that means
the NBP saw the phenomena and may intervene when such a need
emerges," he said.
BONDS WELL-BID
The Czech Republic sold more than it offered at an auction
of 15-year bonds and Polish bonds were also well-bid at a
tender. The success improved sentiment as the region's bond
markets have been under pressure for months. []
[]
But rising Czech yields were less positive and Hungary
continued to buy back its bonds at a weekly auction to help its
bond market which remains almost frozen.[]
On Tuesday, Moody's downgraded Hungary's sovereign rating to
Baa1, following a cut by Standard & Poor's to just one notch
above junk on Monday, with both agencies giving a negative
outlook for Hungarian assets.
Hungary avoided financial meltdown late last year with a
$25.1 billion IMF-led rescue package while sub-investment grade
rated Romania is in talks with the IMF about aid.
Hungary and the Czech Republic are struggling to resolve
domestic political crises which could also weigh on their
markets. [][]
Data on Wednesday showed manufacturing slowed its decline in
Czech Republic and Hungary and rose to a five-month high in
Poland, but still marked a very weak first quarter across the
region. []
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 27.19 27.362 +0.63% -1.61%
Polish zloty <EURPLN=> 4.572 4.643 +1.55% -10%
Hungarian forint <EURHUF=> 304.75 306.83 +0.68% -13.52%
Croatian kuna <EURHRK=> 7.456 7.47 +0.19% -1.22%
Romanian leu <EURRON=> 4.225 4.235 +0.24% -4.98%
Serbian dinar <EURRSD=> 94.56 94.677 +0.12% -5.37%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +42 basis points to 238bps over bmk*
4-yr T-bond CZ4YT=RR -20 basis points to +263bps over bmk*
8-yr T-bond CZ8YT=RR +6 basis points to +336bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR 0 basis points to +434bps over bmk*
5-yr T-bond PL5YT=RR +1 basis points to +380bps over bmk*
10-yr T-bond PL10YT=RR -1 basis points to +327bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -23 basis points to +1088bps over
bmk*
5-yr T-bond HU5YT=RR -57 basis points to +1028bps over
bmk*
10-yr T-bond HU10YT=RR -47 basis points to +891bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1600 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Marius Zaharia,
editing by David Stamp)
