CEE MARKETS-Hungarian bonds draw robust buying after strong GDP data

* CEE growth slows despite Hungarian strength

* Hungary auctions bonds in one of its biggest ever sales

* Warsaw leads stock falls after poor U.S. retail sales data

(Recasts with government bond auctions in Budapest and Bucharest, dealer comments, impact of U.S. retail sales figures) BUDAPEST, Feb 14 (Reuters) - Hungarian government bonds drew robust demand at an auction on Thursday, while a pick-up in the country's economic growth to its fastest since 2004 failed to lift the forint. Central European currencies came under pressure from the dollar's strength early in the session, and from weak U.S. retail sales data later. The largest drop in U.S. retail sales in almost a decade hit stocks in Europe, with Warsaw's bluechip index dropping to a one-month low as it shed about 1 percent by 1445 GMT. Budapest's index fell almost half a percent and danced around the 40,000-point line, even though Hungary reported a pick-up in economic output growth to an annual 5 percent in the last quarter of 2018. That was its strongest since 2004, when the region's states joined the European Union. It bucked a slowdown in Poland, Romania and Slovakia, which still had robust levels well outpacing euro zone peers, led by 4.9 percent growth in Poland. The forint led a mild easing of regional currencies and shed 0.1 percent against the euro to trade at 319.38 despite the strong output data. The U.S. figures underpinned that worries over an economic slowdown could keep interest rates low in the world, also increasing the odds that the National Bank of Hungary will not start to tighten policy soon. Czech and Hungarian inflation figures released earlier surprised on the upside, adding arguments to expectations that the Hungarian central bank could start tightening soon and its Czech counterpart will continue its own tightening. Hungary's bi-weekly government bond auction and top-up tender, including a new 10-year paper, drew robust demand from home and abroad, which led to one of the biggest ever domestic sale, worth 115 billion forints. "Even the new bond, unpriced earlier, was bought in a frenzy," one Budapest-based fixed income trader said. "Hungarian (macroeconomic) figures and their structure is good, hence the interest from buyers," the trader said. In neighbouring Romania, stocks reversed an early rise which followed comments from senate speaker Calin Tariceanu who said the government could scrap a 2 percent tax on energy companies' turnover. This year's tax increases, including a tax on bank assets to finance wage rises and other spending, have been widely criticised by industry and the central bank. Romania's economic output data showed a slowdown in annual growth to 4.1 percent in the fourth quarter from 4.4 in the third quarter, underpinning worries that the draft 2019 budget was based on overly optimistic revenue assumptions. The government sold a higher than planned 320 million lei ($76 million) worth of 5-year bonds at an average yield of 4.29 percent, two percentage points above Hungary's corresponding paper.

CEE SNAPSHOT AT MARKETS 1545 CET

CURRENCI ES

Latest Previous Daily Change bid close change in 2019 Czech <EURCZK= 25.8100 25.7940 -0.06% -0.40% crown > Hungary <EURHUF= 319.3800 319.0700 -0.10% +0.53% forint > Polish <EURPLN= 4.3380 4.3366 -0.03% -1.12% zloty > Romanian <EURRON= 4.7425 4.7421 -0.01% -1.87% leu > Croatian <EURHRK= 7.4060 7.4060 +0.00% +0.05% kuna > Serbian <EURRSD= 118.0500 118.1400 +0.08% +0.21% dinar > Note: calculated from 1800 CET

daily change

Latest Previous Daily Change close change in 2019 Prague 1049.52 1058.060 -0.81% +6.38%

0

Budapest 40045.07 40221.18 -0.44% +2.32% Warsaw 2322.00 2346.39 -1.04% +1.99% Bucharest 7662.13 7678.92 -0.22% +3.77% Ljubljana <.SBITOP 834.08 831.34 +0.33% +3.71% > Zagreb 1751.42 1755.28 -0.22% +0.15% Belgrade <.BELEX1 697.78 702.19 -0.63% -8.39%

5>

Sofia 579.81 573.94 +1.02% -2.46%

BONDS

Yield Yield Spread Daily (bid) change vs Bund change

in

Czech spread

Republic

2-year <CZ2YT=R 1.9450 0.1680 +251bps +17bps

R>

5-year <CZ5YT=R 1.7510 0.0900 +215bps +11bps

R>

10-year <CZ10YT= 1.8210 0.0670 +173bps +10bps

RR> Poland

2-year <PL2YT=R 1.5490 -0.1030 +211bps -10bps

R>

5-year <PL5YT=R 2.1670 -0.0090 +256bps +1bps

R>

10-year <PL10YT= 2.7080 -0.0140 +262bps +2bps

RR>

FORWARD RATE AGREEMEN

T

3x6 6x9 9x12 3M

interban k

Czech Rep 2.08 2.11 2.13 2.00

<PRIBOR=

>

Hungary 0.37 0.58 0.79 0.15 Poland 1.72 1.72 1.72 1.72

Note: FRA are for ask prices quotes

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(Reporting by Sandor Peto Editing by David Goodman)