* Leu, zloty, forint trade near multi-month lows * Romanian CPI -3.3 pct, but central bank seen hawkish * Hungary, Romania, Serbia hold bond auctions By Sandor Peto BUDAPEST, May 12 (Reuters) - Central Europe's main currencies eased on Thursday after data showed Romanian inflation fell deeper into negative territory.
Investors were also cautious before first-quarter economic output figures in the region due on Friday, after weaker than expected industrial output data in Hungary, the Czech Republic and Slovakia. Polish manufacturing growth also slowed sharply in April.
Central European economies posted strong growth last year but latest industrial output data indicate there may have been a slowdown in the first quarter.
Concerns that Moody's may downgrade the credit rating of Poland on Friday have also been weighing on the local market.
The zloty, the forint and the leu traded near multi-month lows against the euro.
The forint and the leu weakened by 0.2 percent by 0752 GMT, to 315.95 and 4.5, respectively, and the zloty shed 0.1 percent to 4.427.
Romanian data released on Thursday showed that annual inflation fell deeper into the negative to -3.3 percent in April and industrial output fell 0.4 percent in March.
The Romanian central bank cut its inflation forecasts earlier this week, but comments from its Governor Mugur Isarescu remained quite hawkish as the bank still expects a fast rebound in inflation by next year.
"We believe that even if headline inflation is flirting with zero in 4Q16 (the fourth quarter of 2016), this should be enough for the central bank to start the policy normalisation process via narrowing the interest rates corridor," ING said in a note.
"We still see above 50 percent probability for this happening this year," they added.
The prospects of monetary tightening in Romania makes its bonds offered at its auction on Thursday less attractive than a bond tender in Serbia, where the central bank can still cut interest rates further, Raiffeisen said in a note.
They said Hungary's final March industrial output figures, which confirmed a 4.6 percent annual fall, undermined the forint.
The currency has also been under pressure due to a selling wave in the government bond market in the past weeks as the central bank has given signals that its new rate cut cycle started in March may be near the end.
The bank's Deputy Governor Marton Nagy said on Thursday that record low interest rates posed a serious challenge to commercial banks' profitability.
"The bank's communication about the rate cuts has not been clear and we will see if banks will want to buy bonds at today's auction," one trader said. "The auction will be sold, the question is if demand will be as aggressive as in the past." Hungarian government bonds were steady ahead of the auction, with 10-year bonds trading at a yield of 3.33 percent.
CEE SNAPS AT 0952 CET MARKETS HOT CURRENCIES Lates Prev Daily Chan t ious ge bid clos change in e 2016 Czech 30 335 9% Hungary 500 4100 1% Polish 0 34 2% Romanian 0 30 % Croatian 0 72 % Serbian 500 8200 6% Note: calculat previ clos 1800 daily ed from ous e at CET change STOCK S Lates Prev Daily Chan t ious ge clos change in e 2016 Prague 867.4 866. +0.06% -9.2 5 93 9% Budapest 26905 2684 +0.23% +12 .65 5.23 .48% Warsaw 1824. 1818 +0.34% -1.8 19 .02 8% Bucharest 6478. 6458 +0.31% -7.5 83 .99 0% Ljubljana > 5 42 00% Zagreb 1711. 1702 +0.54% +1. 74 .62 31% Belgrade 9 05 2% Sofia 442.1 441. +0.03% -4.0 1 96 8% BONDS Yield Yiel Spread Dail d y (bid) chan vs Bund chan ge ge in Czech spre Republic ad 2-year 8 04 s ps 5-year 05 s ps 10-year 25 s s Poland 2-year 07 s ps 5-year 22 s s 10-year 14 s ps FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M inte rban k Czech Rep 0.27 0.24 0.22 0 (PRIBOR= ) Hungary 0.92 0.87 0.88 1.1 Poland 1.63 1.58 1.51 1.67 Note: FRA are for quotes ask prices ************************************************ ************** (Additional reporting by Ivana Sekularac in Belgrade, Luiza Ilie in Bucharest andJakub Iglewski in Warsaw; Editing by Tom Heneghan)