BUDAPEST: Central European currencies mostly gained on Tuesday and government bonds tracked Bunds lower as relief over France's presidential election turned investors towards risky assets.
Hungary's forint was an exception, slipping 0.1 percent to 311.75 by 0756 GMT. The Hungarian central bank is expected to reaffirm its looser monetary policy when it meets later on Tuesday.
Tuesday's gains were smaller than Monday's, when markets rallied after the first round of the French vote on Sunday. That round left centrist Emmanuel Macron poised to win the run-off on May 7 over the anti-euro, anti-globalisation Marine Le Pen.
Regional stock markets were mostly unable to extend gains after the advance on Monday, but in Warsaw the blue-chip stock index rose 0.6 percent.
"A quite big risk has been priced out after the French vote," one Budapest-based trader said. "... The (Hungarian central bank) meeting is unlikely to cause excitement."
Hungarian bond yields were higher by about 1 basis point from Monday.
Yields on Czech two-year debt were was bid at zero, up 9 basis points, but government plans for modest debt issuance in May, published on Monday, should support Czech bonds, CSOB analysts said in a note.
Polish bond yields rose 2 to 3 basis points, with 10-year debt trading at 3.42 percent, before an auction.
The offered amount, worth 6 billion to 9 billion zlotys ($2.31 billion) is quite high, but the expected good demand makes it hard to predict auction yields, market participants said.
The latest inflation figures released in the region have been lower than expected, underpinning the Polish central bank policy not to lift interest rates from record lows, and that supports government bond prices.
Out of the bonds on offer at the auction, the fixed coupon 2022 and 2027 papers are expected to draw the strongest demand, Raiffeisen analyst Imre Stephan said in a note.
Raiffeisen also said that Croatian debt could get support from Monday's 2016 budget data, which showed a surplus of 0.8 percent of economic output, after a 3.4 percent deficit in 2015.
The kuna outperformed regional currencies, firming 0.7 percent to 7.4495 versus the euro.
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