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CEE MARKETS-Forint leads gains on German data, global relief

Sandor Peto

* Renewed hope for U.S.-China trade deal buoys CEE FX, stocks German export data also helps price rises

* Hungarian government bonds extend post-CPI data price gains

* Warsaw stocks lead rise, rebound from 6-month low

* Q1 results boost OTP Bank, knock down Richter shares

BUDAPEST, May 10 (Reuters) - Central European stocks and currencies firmed on Friday, helped by strong German export data and hopes in global markets for a trade deal between the United States and China. A U.S. tariff increase on Chinese goods took force on Friday, but the White House has said the two sides would resume trade talks on Friday, restoring optimism in markets. The MSCI emerging market equities index was up 0.8 percent by 0905 GMT, while the dollar-based currency index firmed 0.3 percent. In Central Europe, the forint led gains, strengthening by 0.2 percent against the euro to 323.45. The zloty, the leu and the Czech crown firmed by 0.1 percent. The forint and Hungarian government bonds have firmed since Thursday when the central bank (NBH) said its main core inflation gauge dropped to 3.4 percent year-on-year in April from 3.4 percent in March. That reduced worries that the bank, which dropped its guidance for gradual monetary tightening, won't get much behind the tightening curve as headline inflation rose to 3.9 percent, only a tad below the top of the NBH's 2-4 percent target range. Hungary' 10-year government bonds traded at a yield of 3.28 percent, down a further 3 basis points from Thursday's fixing even though the 10-year German Bund yield, closely watched in the region, rebounded from 5-week lows. The Czech crown firmed even though the minutes of the Czech central bank's May 2 meeting revealed that a majority of board members agreed that the next interest rate move could go in either direction. A cut would end two years of rate increases by the bank. Surging wages in Central Europe propel inflation, but both the NBH and the CNB have seen weak growth and price and interest rate dynamics in the euro zone as a brake on inflation. Export data released on Friday by Germany, a key trade partner of the region, showed an unexpected rise, supporting the euro whose strengthening against the greenback often helps Central European currencies as well. Polish stocks led a rebound of equities. Warsaw's bluechip index rose 1.2 percent, off Thursday's 6-month lows, mainly driven by PKO BP bank and insurer PZU, companies which are expected to announce rising first-quarter earnings next week.

Budapest's main index ,BUX> gained only 0.2 percent. It was helped by a 2.25 percent rise in the shares of OTP , the region's biggest independent lender which reported higher-than-expected earnings on Friday.

But the index rise was dampened by a 5 percent fall in drug producer Richter shares. Its first-quarter earnings were boosted by one-off items, but costs caused by the EU's drug serialisation requirements kept the rest of its operations weak, Erste analysts said in a note, adding though that the share price drop was overdone.

CEE SNAPSHOT ATMARKETS 1105 CET

CURRENCI ES

Latest Previous Daily Changebid close change in 2019Czech <EURCZK= 25.7270 25.7450 +0.07% -0.08%crown >Hungary <EURHUF= 323.4500 324.3200 +0.27% -0.73%forint >Polish <EURPLN= 4.2971 4.2995 +0.06% -0.17%zloty >Romanian <EURRON= 4.7575 4.7604 +0.06% -2.18%leu >Croatian <EURHRK= 7.4060 7.4068 +0.01% +0.05%

kuna

Serbian <EURRSD= 117.8300 117.9300 +0.08% +0.40%dinar >Note: calculated from 1800 CET

daily change

Latest Previous Daily Changeclose change in 2019Prague 1054.96 1051.400 +0.34% +6.93%

0

Budapest 41273.08 41207.46 +0.16% +5.45%Warsaw 2203.83 2179.40 +1.12% -3.20%Bucharest 8312.92 8298.17 +0.18% +12.59%Ljubljana <.SBITOP 867.12 865.12 +0.23% +7.82%>Zagreb 1842.28 1842.68 -0.02% +5.34%Belgrade <.BELEX1 734.97 733.61 +0.19% -3.51%

5>

Sofia 565.98 568.88 -0.51% -4.79%

BONDS

Yield Yield Spread Daily(bid) change vs Bund change

in

Czech spread

Republic

2-year <CZ2YT=R 1.6340 0.0180 +226bps +2bps

R>

5-year <CZ5YT=R 1.7380 0.0200 +220bps +1bps

R>

10-year <CZ10YT= 1.8720 -0.0130 +191bps -3bps

RR> Poland

2-year <PL2YT=R 1.6590 -0.0090 +228bps -1bps

R>

5-year <PL5YT=R 2.2840 -0.0010 +275bps -1bps

R>

10-year <PL10YT= 2.9230 -0.0110 +296bps -2bps

RR>

FORWARD RATE AGREEMEN

T

3x6 6x9 9x12 3M

interban k

Czech Rep 2.26 2.27 2.27 2.21

<PRIBOR=

>

Hungary 0.38 0.54 0.72 0.16Poland 1.75 1.76 1.79 1.72

Note: FRA are for ask prices quotes

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(Reporting by Sandor Peto; editing by Emelia Sithole-Matarise)