* Zloty hits 2-month high, awaits CPI data
* GDP in region improves, supports FX
* Global mood broadly positive as euro zone exits recession
(Updates with bonds, details)
PRAGUE/BUDAPEST, Nov 13 (Reuters) - Poland's zloty neared a
two-month peak on Friday, and currencies across central and
eastern Europe were helped by signs some of its worst-hit
economies were stabilising.
Gross domestic product data out of the Czech Republic,
Slovakia, Romania and Hungary showed year-on-year contractions
but also signs recovery was in motion, with the Czech and Slovak
economies growing on a quarterly basis.[]
Poland, the only country that has avoided recession in the
economic crisis, reports third quarter data later this month,
but the zloty has jumped this week on the back of a
strengthening current account balance. []
Markets on Friday were watching for October inflation data
due on later in the day. The central bank there has shifted to
an informal neutral bias on interest rates from a long-held
easing bias.
The zloty <EURPLN=> rose 0.4 percent to bid at 4.113 to the
euro by 1148 GMT. Hungary's forint <EURHUF=> gained 0.7 percent
to lead gains while the Czech crown <EURCZK=> bid up 0.3
percent.
Markets were all underpinned by a rise for the euro and
global risk appetite as data showed the euro zone coming out of
recession.
"The big picture is GDP improved, particularly in the Czech
Republic and Romania. I'm a little surprised on the forint
reaction as this number for me was a little disappointing," said
UniCredit strategist Gyula Toth.
He said the data could lead to more differentiation among
currencies in the region going forward.
Third-quarter GDP figures in Western Europe showed recovery
gained traction, and Germany -- the key export market of Central
European states -- posted quarterly growth of 0.7
percent.[]
HUNGARY, ROMANIA LAGGARDS
The figures showed that Hungary and Romania, where interest
rates are highest in the region, lagged recovery in other
states. Analysts' have said the prospects of the zloty are the
best in the region because Poland's economy has consistently
looked the strongest.
Hungary's economy contracted by 7.2 percent in the third
quarter in annual terms, slower than 7.5 percent in the second
quarter, but more than analysts' 6.4 percent forecast.
[]
The Czech economy posted 0.8 percent quarter-on-quarter
growth and previous data was also revised upward. []
Central bank minutes on Friday also showed governor Zdenek
Tuma was again outvoted by the board when it narrowly voted not
to cut interest rates. []
The crown has firmed more than 4 percent this month after
markets reversed expectations for policy easing. Analysts expect
the bank has ended a cycle of 250 basis points in easing that
started last year and brought rates to a record low 1.25
percent.
In Romania, the leu <EURRON=> also edged higher after a much
less than expected year-on-year economic contraction.
But the unit stuck in ranges it has seen over the past few
months as the country stumbles to form a new government, raising
risks to the country's IMF package. []
The zloty, forint and crown have all moved stronger despite
a rebound of the dollar this week. Dollar weakness has given a
boost to emerging market assets this month as some investors
take advantage of the low interest rate differential.
"It is a bit odd that the region is firming despite gains in
the dollar, we will see what happens when (the dollar) changes
tack, the market looks a bit jumbled," a Budapest dealer said.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.465 25.535 +0.27% +5.06%
Polish zloty <EURPLN=> 4.113 4.13 +0.41% +0.05%
Hungarian forint <EURHUF=> 269.1 270.97 +0.69% -2.06%
Croatian kuna <EURHRK=> 7.299 7.29 -0.12% +0.9%
Romanian leu <EURRON=> 4.297 4.299 +0.05% -6.58%
Serbian dinar <EURRSD=> 94.23 94.2 -0.03% -5.04%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +6 basis points to 114bps over bmk*
7-yr T-bond CZ7YT=RR +3 basis points to +108bps over bmk*
10-yr T-bond CZ10YT=RR +3 basis points to +87bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +3 basis points to +370bps over bmk*
5-yr T-bond PL5YT=RR +4 basis points to +324bps over bmk*
10-yr T-bond PL10YT=RR +3 basis points to +279bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +3 basis points to +522bps over bmk*
5-yr T-bond HU5YT=RR +4 basis points to +460bps over bmk*
10-yr T-bond HU10YT=RR +3 basis points to +396bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1248 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet/Sandor
Peto; editing by Patrick Graham)
