* Zloty pares gains from GDP data, global mood volatile
* Hungarian budget vote watched
* Romania, Poland announce December bond issuance plans
(Adds new prices, details)
By Jason Hovet and Marius Zaharia
PRAGUE/BUCHAREST, Nov 30 (Reuters) - The zloty was stable
along with its peers on Monday, after brief gains on data
showing stronger-than-expected Polish growth in the third
quarter were erased by swings in global risk appetite.
Poland's economy, central Europe's largest and the only one
in the region to avoid recession this year, expanded 1.7 percent
in the third quarter, lifted by consumer demand and boding well
for the region's recovery. []
Earlier in the day, data showed Czech industry posted its
slowest annual drop in a year at 7.3 percent in October.
[]
Polish bonds were little changed after the data and the
zloty <EURPLN=> was bid at around 4.142 to the euro by 1533 GMT,
flat on the day, but off an intra-day high of 4.1265.
"The region weakened as the dollar gained some 30 units over
the euro over the past one-two hours," one Bucharest-based
dealer said. "But Polish GDP data shows that the economic
outlook in the region is getting better and those currencies
will start to reverse losses when global mood goes up again."
Strategists have tipped the unit to outperform peers into
next year because of Poland's stronger fundamentals, although
worries over the country's rising debt levels have hindered it
in recent months.
"The strong growth numbers are not being felt in the fiscal
area and the government cannot be complacent about its budget
deficit," said Nomura emerging economist Peter Attard Montalto.
"(But) today's data feed into our view of strong zloty
outperformance."
Emerging European assets were swept up in worry over Dubai
debt. Analysts said there was no direct link for the region,
although the concerns highlighted debt problems that countries
like Ukraine or Hungary still face.
The euro, <EUR=> seen as a gauge for risk appetite, gained
earlier on Monday against the dollar, after the United Arab
Emirates central bank promised to help local banks, but the
greenback trimmed some losses later after a top Dubai official
said the government does not guarantee Dubai World debt.
[]
Dealers say central European currencies will still be
tightly linked to global mood changes until economic recovery
moves on a safer path and investors will begin to differentiate
among regions and assets.
BUDGET VOTE
The Hungarian Parliament is widely expected to approve the
2010 budget in a final vote later on Monday as the country aims
to cut the deficit to 3.8 percent of gross domestic product, in
line with its IMF-led aid package obligations.
The opposition Fidesz party, seen as the victor of next
year's election has said the deficit could actually be twice
that amount. []
Hungary's forint <EURHUF=> was a touch weaker at 272.9 to
the euro and Romania's leu <EURRON=> -- with markets eyeing the
run-off presidential vote on Sunday -- was slightly stronger at
4.262, ahead of a market holiday on Tuesday.
The Czech crown <EURCZK=>, the region's traditional
safe-haven currency that outgained peers last week in the flight
to safer assets, was off 0.3 percent at 26.11 per euro.
Elsewhere, Romania said it plans to increase its bond
issuance to 1.8 billion lei in December from 264 million lei in
November, to plug its ballooning budget deficit.[]
Poland also announced its debt plans for December, when it
will offer up to 1.8 billion zlotys in road bonds and 3-5
billion zlotys worth of 2- and 5- year bonds [].
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26.114 26.042 -0.28% +2.45%
Polish zloty <EURPLN=> 4.142 4.141 -0.02% -0.65%
Hungarian forint <EURHUF=> 272.9 272.57 -0.12% -3.43%
Croatian kuna <EURHRK=> 7.308 7.305 -0.04% +0.78%
Romanian leu <EURRON=> 4.262 4.271 +0.21% -5.81%
Serbian dinar <EURRSD=> 94.9 94.78 -0.13% -5.71%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -9 basis points to 96bps over bmk*
7-yr T-bond CZ7YT=RR -6 basis points to +121bps over bmk*
10-yr T-bond CZ10YT=RR -12 basis points to +98bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -11 basis points to +541bps over bmk*
5-yr T-bond HU5YT=RR -11 basis points to +489bps over bmk*
10-yr T-bond HU10YT=RR -12 basis points to +433bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1733 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 and
Marius Zaharia; Editing by Ruth Pitchford)
((prague.newsroom@thomsonreuters.com; Reuters Messaging:
jason.hovet.reuters.com@reuters.net; +420-224 190 476))
