CEE MARKETS-Strong Polish industrial data lends zloty temporary relief

By Sandor Peto

BUDAPEST, May 22 (Reuters) - Central Europe's main currencies eased slightly on Wednesday as global trade tensions weighed on risk appetite, although a jump in Polish industrial output gave the zloty brief respite.

Assets in the region were largely rangebound as emerging markets moved in line with the neighbouring euro zone EUR=, with the forint EURHUF= and the zloty EURPLN= easing slightly against the euro by 0856 GMT.

The zloty briefly regained some ground after April data showed a robust 9.2 percent annual rise in Polish industrial output and an unexpected slight pick-up in producer prices.

Data released in recent weeks indicates that robust economic growth continues, but central banks show no signs that they will increase interest rates to fight accelerating inflation.

There is no need to change Polish interest rates in 2019, but a rise in 2020 cannot be ruled out, Polish rate-setter Rafal Sura said after Wednesday's figures.

"For those members of the (Monetary Policy) Council who are worried by accelerating inflation... the very good data on industrial production will be an impulse to think about rate hikes," said Monika Kurtek, chief economist at Bank Pocztowy.

"It is unlikely, however, that there will be a majority in the Council that would vote in favour of such a proposal," she added.

Polish government bond yields, instead of rising after the strong figures, tracked a mild drop in Bunds.

While Poland's inflation ran well within the central bank's 1.5-3.5% target range in April, Hungary's 3.9% figure was near the top of the National Bank of Hungary's 2-4% range.

The forint weakened to 9-month lows against the euro in the past few sessions as the bank is not expected to tighten policy at its meeting on May 28, nor possibly at its June meeting, market participants have said.

Resistance at 327.6 against the euro gave some relief to the currency, which may be temporary.

"Given the fundamentals, with strong growth and rising inflation, with a neutral or mildly negative global backdrop, the forint is where it should be," one Budapest-based dealer said.

"This is not a definite risk off mood, I would rather say investors handle emerging market assets cautiously. Why should they buy the forint now?... while they have no reason for a strong sell-off either," the dealer added.

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