* First Czech CPI rise in six months helps boost crown * Regional currencies firm as dollar is off highs * Czech bond yields rise, Hungarian and Polish yields fall * Smooth bond sale predicted at Hungarian auction * Serbian cbank seen keeping main rate on hold at 3.25 pct By Sandor Peto and Robert Muller BUDAPEST/PRAGUE, May 10 (Reuters) - The crown led a firming of Central European currencies and Czech government bonds extended their losses after March annual data showed the first pick-up in Czech inflation in six months. The rate rose to 1.9 percent from 1.7 percent in March, adding fuel to expectations for continuing Czech central bank (CNB) interest rate hikes. The crown firmed half a percent to 25.47 against the euro by 0814 GMT and the forint and the zloty gained 0.3 percent, helped by a retreat of the dollar from this year's highs against the euro. "There is a combination of two factors - a poor (Czech bonds) auction yesterday and hawkish Czech central bank, plus today's inflation data," a Prague-based dealer said. "The yields are (still) quite low compared to assumed central bank's interest rates in the coming period," the dealer added. The yield on Czech 5-year bonds was bid 9 basis points higher at 1.3 percent, a 6-week high. A jump in Czech yields since Wednesday's weak bond auction contrasted with a retreat in yields in Warsaw and Budapest, and expectations for solid demand at Hungary's bi-weekly bond auction. Yields in Romania, where the central bank has launched an interest rate hike cycle just like the CNB, increased. Bonds in core markets were mixed. At a U.S. 10-year bond auction on Wednesday, the yield rose to 2.995 percent, the highest of this maturity since 2014, but some investors had a positive interpretation. "It is a good sign that it did not go above the 3 percent line... and if U.S. CPI due later today is weak, (bond markets) can rebound," one Budapest-based fixed income trader said. "The increased yield levels (after a global rise this month) could ensure demand at the Hungarian auction and it will be smoothly sold," the trader said. The government probably cannot sell as much bonds as at its past two bond auctions, the trader added. It sold bonds worth more than 100 billion forints ($377.74 million)at each of those auctions, frontloading its 2018 issuance, as a pre-financing of European Union-sponsored projects boosted the budget deficit in the first months of the year. Elsewhere, the leu did not join the firming of its regional peers, after Romania reported a widening in its first-quarter trade deficit. Serbia's central bank is expected to keep rates on hold at its meeting, but some analysts did not rule out that the bank may repeat the surprise rate cuts delivered at its past two meetings. The dinar firmed 0.1 percent to 118.17 against the euro. CEE SNAPSHOT AT MARKETS 1014 CET CURRENCI ES Latest Previous Daily Change bid close change in 2018 Czech <EURCZK= 25.4700 25.5850 +0.45% +0.28% crown > Hungary <EURHUF= 314.6000 315.4900 +0.28% -1.17% forint > Polish <EURPLN= 4.2470 4.2615 +0.34% -1.66% zloty > Romanian <EURRON= 4.6430 4.6450 +0.04% +0.79% leu > Croatian <EURHRK= 7.3850 7.3885 +0.05% +0.61% kuna > Serbian <EURRSD= 118.1700 118.2600 +0.08% +0.28% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2018 Prague 1098.79 1093.010 +0.53% +1.91% 0 Budapest 36772.03 36588.26 +0.50% -6.62% Warsaw 2288.51 2281.12 +0.32% -7.02% Bucharest 8801.27 8750.27 +0.58% +13.51% Ljubljana <.SBITOP 874.10 847.13 +3.18% +8.40% > Zagreb 1824.54 1821.36 +0.17% -0.99% Belgrade <.BELEX1 736.38 737.47 -0.15% -3.08% 5> Sofia 650.93 652.18 -0.19% -3.91% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech Republic spread 2-year <CZ2YT=R 0.8640 0.1010 +143bps +11bps R> 5-year <CZ5YT=R 1.2970 0.0850 +136bps +8bps R> 10-year <CZ10YT= 1.8640 0.0230 +130bps +2bps RR> Poland 2-year <PL2YT=R 1.5790 -0.0010 +215bps +1bps R> 5-year <PL5YT=R 2.5050 -0.0160 +256bps -2bps R> 10-year <PL10YT= 3.2590 -0.0050 +270bps -1bps RR> FORWARD RATE AGREEMEN T 3x6 6x9 9x12 3M interban k Czech Rep 0.98 1.10 1.19 0.90 <PRIBOR= > Hungary 0.07 0.10 0.18 0.05 Poland 1.73 1.75 1.80 1.70 Note: FRA are for ask prices quotes *********************************************************** *** ($1 = 264.7300 forints) (Editing by Richard Balmforth)