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CEE MARKETS-Currencies, stocks fall after EU cuts euro zone growth forecasts

* Forint leads FX losses as Brussels cuts euro zone GDP forecasts * Forint vulnerable ahead of possible rise in April CPI * Equities track decline in Western European stock markets (Recasts with European Commission forecasts, increased losses in forint and CEE stock markets) By Sandor Peto BUDAPEST, May 7 (Reuters) - Central European currencies and stocks eased on Tuesday after the European Commission cut its forecasts for growth in the euro zone.

An escalation in trade tensions between the United States and China had already soured sentiment in global markets, weighing on asset prices in emerging economies.

Hungary's forint led a weakening of currencies in the European Union's eastern countries, losing 0.2 percent versus the euro by 1315 GMT to trade at 324.3. The zloty and the leu eased by 0.1 percent.

One Budapest-based dealer said the forint could easily weaken through last week's 5-month lows of 324.85 towards 325 or 326.

The currency extended early losses after the European Commission cut its forecasts for economic growth in the euro zone to 1.2 percent for this year and 1.5 percent next year.

"The weak data suggest that the European Central Bank may not need to tighten its policy," the dealer said.

Loose euro zone monetary policy could prevent the National Bank of Hungary (NBH) from tightening its own conditions despite rising inflation, fuelling worries over its credibility, market participants said.

Hungary is due to release April inflation figures on Thursday, with some analysts expecting the annual rate to reach the top of the central bank's 2-4 percent target range from 3.7 percent in March.

"In the euro zone, there is no inflation pressure, but in Hungary, there is," the dealer said.

A Reuters poll of analysts conducted last week showed that monetary tightening in response to rising inflation was seen helping the forint and the Czech crown to strengthen in the coming year.

The region's main equity indexes mostly mirrored falls in London and Frankfurt.

Warsaw led the way lower with its bluechip index down 1.2 percent to its lowest level since early January.

Shares of Alior rose 2.3 percent and reversed some of Monday's losses after the bank reported first-quarter profits in line with forecasts.

But most shares declined, including PGE, which fell 5.5 percent, and JSW, which was down 7.1 percent.

State-run power utility PGE reported a fall in first-quarter earnings, while state-run coal producer JSW's stocks plunged after ArcelorMittal Poland said on Monday it planned to halt its blast furnace and steel plant in Krakow in September.

JSW's shares fell even though ArcelorMittal said its purchases from the company should remain stable.

Polish government bond yields tracked a drop in Bund yields. The 10-year Polish yield dropped 3 basis points to 2.969 percent, while Hungary fixed its corresponding yield higher by 1 basis point at 3.32 percent.

CEE SNAPSHOT AT MARKETS 1516 CET CURRENCI ES Latest Previous Daily Change bid close change in 2019 Czech Hungary Polish Romanian Croatian Serbian Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2019 Prague 1065.40 1064.710 +0.06% +7.99% 0 Budapest 41241.44 41547.35 -0.74% +5.37% Warsaw 2261.92 2290.13 -1.23% -0.65% Bucharest 8422.73 8380.61 +0.50% +14.07% Ljubljana <.SBITOP 881.04 880.66 +0.04% +9.55% > Zagreb 1835.71 1827.45 +0.45% +4.97% Belgrade <.BELEX1 736.38 742.64 -0.84% -3.32% 5> Sofia 568.19 571.30 -0.54% -4.42% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year 5-year 10-year Poland 2-year 5-year 10-year FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 2.26 2.27 2.28 2.21 (PRIBOR= ) Hungary 0.34 0.52 0.70 0.16 Poland 1.75 1.76 1.79 1.72 Note: FRA are for ask prices quotes ************************************************* ************* (Reporting by Sandor Peto Editing by Kirsten Donovan)