* Currencies up on Hungarian intervention rumour
* Recent rally a short correction rather than trend reversal
* Markets await more news on potential Romanian aid package
* Hungary, Czech currencies shrug off GDP data
(Adds fresher quote, fixed income)
By Dagmara Leszkowicz
WARSAW, March 11 (Reuters) -Poland's zloty and Hungary's
forint led emerging European currencies higher on Wednesday,
helping the Czech crown almost erase this year's losses despite
worse than expected GDP data.
Romania's leu was slightly higher but dealers said they were
awaiting more details on a potential IMF-led bailout package a
day after the government asked for international aid to avoid a
financing crisis.
Market players stayed wary that Hungarian policymakers could
be intervening to prop up the battered forint after central bank
Governor Andras Simor indicated on Tuesday the bank may have
sold euros from its reserves or shifted government EU funds
through the market.
On Tuesday, the forint leapt more than 2 percent, pulling
the Polish zloty and the Czech crown higher. The crown briefly
clawed back its losses this year to break even at 26.69 per euro
before sliding back slightly weaker.
"There is a bit of speculation that the Hungarians are
intervening but I don't think that is the case. People are
talking about it ... but the locals don't seem to think so," a
London-based dealer said.
"I think really the market is just long euro, and getting
stopped out. We've had two days in a row of things not getting
worse on the stocks front."
Another regional analyst said the rally is likely to be a
short correction and a general weakening trend had not changed
yet.
"I don't think it is a reversal of the trend... but the
timing of (intervention) rumours is perfect as it is combining
with a good sentiment on the global stock markets," said Ulrich
Leuchtmann, analyst at Commerzbank.
Stock indices in the region also gained with Prague's PX
<.PCX> rising 2.0 percent rise and Warsaw WIG20 <> up 1.8
percent.
At 0939 GMT, Hungary's forint <EURHUF> was 1.4 percent up
versus the euro while the Polish zloty <EURPLN=> gained 1.6
percent. The crown <EURCZK=> was 1.0 percent and Romania's leu
<EURRON=> firmed slightly.
Czech and Hungarian growth data for the fourth quarter was
worse than preliminary estimates. Czech growth was revised down
to 0.7 percent on an annual basis, while Hungary contracted 2.3
percent, although dealers said it was unlikely to hit markets.
"It was slightly expected because the first forecast was
based without fresh figures from exports, industrial output or
retail sales," said David Marek, chief economist at Patria
Finance.
Poland's finance minister was more bullish, saying growth
would be between 1.7 and 3.7 percent in 2009, a more optimistic
outlook than a Reuters poll in which analysts forecast growth of
1.2 percent. []
Dealers said the zloty was likely to follow global markets
for the time being. It has closely tracked stock markets in
recent weeks, benefiting when markets exhibit increased risk
appetite and sliding back when the opposite happens.
"As long as the zloty will not exceed the level of 4.63 to
the euro for some time it is difficult to say about any trend
reversal," said a Warsaw-based dealer. It was last trading at
4.597.
Romania released inflation data showing annual inflation
rose to 6.9 percent last month.
"In these times, inflation is the smallest problem. Now
everybody is looking at external funding (needs) and economic
activity," a dealer said.
Dealers have said the leu, which has been relatively stable
compared to its peers over the past weeks, could be moved
near-term only be the announcement of the amount Romania plans
to get from the EU, IMF and other financial institutions.
Bond markets also benefited from improving global sentiment
and despite worse than expected GDP data.
"Yields are down thanks to optimism on the stock market and
strengthening zloty," said Remigiusz Zalewski, bond dealer at
BRE bank in Warsaw.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26.828 27.098 +1.01% -0.28%
Polish zloty <EURPLN=> 4.597 4.671 +1.61% -10.49%
Hungarian forint <EURHUF=> 300.56 304.76 +1.4% -12.31%
Croatian kuna <EURHRK=> 7.443 7.438 -0.07% -1.05%
Romanian leu <EURRON=> 4.28 4.284 +0.09% -6.21%
Serbian dinar <EURRSD=> 94.348 94.25 -0.1% -5.16%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +3 basis points to 236bps over bmk*
4-yr T-bond CZ4YT=RR -23 basis points to +245bps over bmk*
8-yr T-bond CZ8YT=RR -22 basis points to +300bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -6 basis points to +432bps over bmk*
5-yr T-bond PL5YT=RR -6 basis points to +380bps over bmk*
10-yr T-bond PL10YT=RR -8 basis points to +315bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 0939 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, Writing by Dagmara Leszkowicz)
