CEE MARKETS-Currencies firm slightly, Hungarian CPI data quashes rate cut hopes

BUDAPEST, Nov 10 (Reuters) - Central Europe's currencies firmed slightly on Tuesday morning, helped by falling global oil prices, while October data showing a pickup in inflation in Hungary dampened market expectations for a small rate cut by the Hungarian central bank this year.

The National Bank of Hungary kept its base interest rate at 5.5% last month amid upside inflation risks from global energy prices and said that a cautious policy was needed due to rising yields and economic uncertainty.

The median forecast in a Reuters poll taken before the October meeting projected a 25-basis-point rate cut to 5.25% by the end of 2026, but Tuesday's data cast doubts over any further easing this year due to a rise in inflation.

ING Bank said chances for a Hungarian rate cut this year "would require a significant, fundamental and favorable change in the geopolitical environment" and their baseline scenario does not include such an event.

Hungary's forint was flat at 362.40 to the euro, after gains posted on Monday on an improvement in global sentiment and decline in oil prices.

CZECH RATE HIKE PRICING

In the Czech Republic, the crown was up a touch at 24.339 to the euro as lower market rates reflected scaled-back expectations of further rate hikes, following last week's increase by the Czech National Bank.

Czech market rates see a further two interest rate hikes in the next 12 months, one fewer than previously as rates markets have corrected recently.

"Rates in the region saw another leg of a rally yesterday as the market priced out rate hikes from the curve, following a decline in energy prices. FX saw only limited gains, despite a global risk-on sentiment," ING said.

Romania's leu was flat at 5.3422 per euro, with focus on the central bank meeting later in the week at which it is expected to hold policy steady.

On stock markets, Prague .PX led gains in the region.