* Currencies weaker, shrug off local data, eye stocks
* Crown gets support as President vetoes scrap subsidies
* Poland's bond tenders, CPI release in focus for next week
(Updates prices, adds fresh quote)
By Marton Dunai and Dagmara Leszkowicz
BUDAPEST/WARSAW, July 10 (Reuters) - Emerging European
currencies eased a touch on Friday but a lack of market-moving
news kept them in tight ranges ahead of a potentially busy week
with bond auctions and important data releases.
At 1421 GMT, The Czech crown <EURCZK=> traded 0.04 percent
lower, while other currencies also eased with the forint falling
<EURHUF=> by 0.4 percent, the zloty <EURPLN=> by 0.02 percent
and the leu <EURRON=> by 0.07 percent.
Regional stocks were in the red on Friday, with only
Prague's PX <> bucking the trend and rising some 0.5 percent.
Bank CSOB said the crown may have gained some support after
President Vaclav Klaus vetoed a law on car-scrapping subsidies.
It said the market had seen the plan as negative because more
stimulus spending could further undermine an already strained
budget.
Global sentiment was also key, CSOB said.
"The region weakened a bit, but it's not a significant move
with rather low liquidity," Marcin Bilbin, a dealer at Pekao
bank in Warsaw said. "Besides, if stocks are falling, currencies
are under pressure."
"We will monitor data next week as fundamentals can always
give impulse for any moves," Bilbin added.
In Romania, annual inflation slowed to 5.9 percent in June,
a touch above expectations, but markets were unmoved and the leu
was flat. []
"With economic activity continuing to decline there is not
much inflationary pressure and this could keep the door open for
further moderate monetary easing -- at least as long as the leu
remains relatively stable," Danske Bank analyst Lars Christensen
said.
Hungary and Poland are due to publish June inflation figures
on July 14, while industrial production data are to be published
in the Czech Republic and Hungary next Wednesday and for Poland
on Friday.
AUCTIONS EYED NEXT WEEK
Polish bonds gave back earlier gains on Friday ahead of next
week's bond tender, which dealers said could set market
sentiment anew. Poland will offer 1.0-2.0 billion zlotys in
bonds maturing in 2014 at a tender.
"The market weakened a bit, but prices had risen before, so
it's profit-taking," said Pawel Bialczynski, dealer at BRE bank
in Warsaw.
Poland's central bank on Friday sold a record high 41.5
billion zlotys in 7-day bills and one policymaker said the
bank's Monetary Policy Council (MPC) may not be very keen to cut
again the required reserve rate. []
The MPC has already cut the rate in May by 50 basis points
to 3.0 percent in order to provide banks with more liquidity
and, as a result, boost lending.
Hungary will also sell bonds next week, and the state debt
management agency AKK more than doubled the amount to be
auctioned off to 55 billion forints from 24 billion forints at
the previous tender.
A dealer on Friday said he expected the sale to be a
success, as demand has been consistently strong in recent days.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26,029 26,019 -0.04% +2.78%
Polish zloty <EURPLN=> 4,368 4,367 -0.02% -5.79%
Hungarian forint <EURHUF=> 277,13 276,03 -0.4% -4.9%
Croatian kuna <EURHRK=> 7,319 7,347 +0.38% +0.63%
Romanian leu <EURRON=> 4,214 4,211 -0.07% -4.74%
Serbian dinar <EURRSD=> 93,217 92,7 -0.55% -4.01%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +1 basis points to 162bps over bmk*
4-yr T-bond CZ4YT=RR +1 basis points to +177bps over bmk*
8-yr T-bond CZ8YT=RR +11 basis points to +314bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +3 basis points to +405bps over bmk*
5-yr T-bond PL5YT=RR -28 basis points to +324bps over bmk*
10-yr T-bond PL10YT=RR -1 basis points to +293bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -33 basis points to +753bps over bmk*
5-yr T-bond HU5YT=RR -33 basis points to +674bps over bmk*
10-yr T-bond HU10YT=RR +37 basis points to +570bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1621 CET.
Currency percent change calculated from the daily domestic
close at 1500 GMT.
(Reporting by Reuters bureaus, writing by Marton Dunai and
Dagmara Leszkowicz)
