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CEE MARKETS-Forint assets gain, with central bank holding fire

* Risk appetite returns as U.S.-China trade war fears ease

* Hungarian central bank holds rates at record lows

* Romania bucks bonds firming after big Feb budget deficit

* Polish bond auction draws solid demand

(Adds Hungarian central bank decisions, CCC stocks rise, Polish bond auction result, Czech central bank rates poll) BUDAPEST, March 27 (Reuters) - Budapest joined in the gains for most Central European assets, driven by a global rise in risk appetite, even though Hungary's central bank (NBH) reaffirmed its loose monetary policy on Tuesday. Reports of behind-the-scene talks between the United States and China to avert a trade war boosted risk appetite globally. For now, investors are shrugging off a planned joint action states, to expel Russian diplomats, in response to the poisoning of a Russian former double agent in England. Warsaw led a rise in equities, with its blue-chip index gaining 1.1 percent by 1405 GMT. CCC stocks jumped 5.1 percent, after the shoe retailer said on Monday that it planned to double sales by 2022. The zloty gained 0.2 percent against the euro, leading regional currencies, which have been under pressure in the past two months from global market jitters and a retreat in inflation in most of the region. Government bond auctions drew solid demand and yields dropped in Warsaw and Belgrade. Hungarian government bond yields dropped by a few basis points, with their curve flattening. Hungary's central bank kept interest rates on hold at its meeting as expected and reiterated that it wanted to keep monetary conditions loose. The forint firmed mildly, in tandem with other regional units, to 312.65 against the euro. "Expected tightening by the ECB (European Central Bank) soon, and loose monetary policy by the NBH could weaken the unit, while fundamentals remain strong," Equilor brokerage said in a note. It added that the forint was unlikely to ease beyond the 318-320 range. Romania's yield curve also flattened, but long-term yields did not drop there, and two- and three-year yields rose. Romania's central bank is expected to raise rates again next week after a surge in wages boosted inflation. The yield on Romanian two-year government bonds was bid higher by 14 basis points at 2.73 percent. Yields rose after the finance ministry reported late on Monday a deficit of 0.6 percent of economic output for February, even though the deterioration in the figures had been expected . The impact was offset by offset by the government meeting its borrowing target for March despite fluctuations in demand at its auctions, Raiffeisen analysts Nicolae Covrig said. Czech yields changed little. The Czech central bank is likely to hold rates unchanged on Thursday and keep them flat until a hike in the third quarter as inflation has slowed, a Reuters poll of analysts showed.

CEE SNAPSHOT AT MARKETS 1605 CET

CURRENCI ES

Latest Previous Daily Change bid close change in 2018 Czech <EURCZK= 25.4650 25.4700 +0.02% #VALUE! crown > Hungary <EURHUF= 312.6500 312.8100 +0.05% #VALUE! forint > Polish <EURPLN= 4.2130 4.2215 +0.20% #VALUE! zloty > Romanian <EURRON= 4.6500 4.6520 +0.04% #VALUE! leu > Croatian <EURHRK= 7.4400 7.4425 +0.03% #VALUE! kuna > Serbian <EURRSD= 118.4300 118.6600 +0.19% #VALUE! dinar > Note: calculated from 1800 CET

daily change

Latest Previous Daily Change close change in 2018 Prague 1116.62 1110.400 +0.56% +3.57%

0

Budapest 37264.59 37087.05 +0.48% -5.37% Warsaw 2266.21 2240.65 +1.14% -7.92% Bucharest 8745.88 8722.84 +0.26% +12.80% Ljubljana <.SBITOP 826.11 826.98 -0.11% +2.45% > Zagreb 1826.92 1817.36 +0.53% -0.87% Belgrade <.BELEX1 746.82 748.78 -0.26% -1.71%

5>

Sofia 655.25 653.82 +0.22% -3.28%

BONDS

Yield Yield Spread Daily (bid) change vs Bund change

in

Czech spread

Republic

2-year <CZ2YT=R 0.8330 0.0720 +143bps +8bps

R>

5-year <CZ5YT=R 1.2780 -0.0250 +136bps -1bps

R>

10-year <CZ10YT= 1.9210 -0.0030 +141bps +1bps

RR> Poland

2-year <PL2YT=R 1.5220 -0.0240 +212bps -2bps

R>

5-year <PL5YT=R 2.3900 -0.0040 +248bps +1bps

R>

10-year <PL10YT= 3.2240 0.0000 +271bps +1bps

RR>

FORWARD RATE AGREEMEN

T

3x6 6x9 9x12 3M

interban k

Czech Rep 0.96 1.06 1.23 0.90

<PRIBOR=

>

Hungary 0.07 0.10 0.18 0.03 Poland 1.72 1.73 1.78 1.70

Note: FRA are for ask prices quotes

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(Additional reporting by Luiza Ilie in Bucharest/Marcin Goclowski in Warsaw; Editing by Catherine Evans)