*

Czech jobless rate dips to 3.7% in April

*

Hungary's April inflation rises to 3.7% y/y

*

Stocks up 0.9%, FX adds 0.1%

By Shashwat Chauhan

May 10 (Reuters) - A gauge of emerging markets equities

eyed its third straight weekly gain on Friday as risk sentiment

flourished on rising hopes that the U.S. Federal Reserve could

consider cutting interest rates this year.

The MSCI's index for emerging market stocks added

0.9% by 0830 GMT, on track to log a weekly gain of around 1%,

while a gauge for currencies rose 0.1%.

Bourses in emerging European markets joined in the global

cheer, with stocks in Hungary, Czech Republic and

Romania up between 0.1% and 0.5%.

Amongst currencies, Hungary's forint held steady

at 387.8 per euro after data showed headline inflation inched up

in line with expectations in April, ending a 14-month run of

declines.

"The forint has taken this morning's inflation print in

stride - though given that data remains broadly consistent with

NBH forecasts and in line with market expectations, this

reaction is not surprising," said Nicholas Rees, FX market

analyst at Monex Europe.

"Policymakers are likely to remain cognisant of some of the

upside inflation risks from a weak forint, and geopolitical

tensions. But with these not materialising at present, we doubt

that the NBH easing cycle is likely to be derailed in the short

term."

Poland's zloty fell 0.2%, a day after the

country's central bank stuck to its wait-and-see approach and

left interest rates unchanged at 5.75% for the seventh month in

row.

The Czech crown edged 0.1% lower, but was hovering

near three-month highs after data showed the county's

unemployment rate dipped to 3.7% in April from 3.9% last month.

Investors also pared through minutes from the Czech central

bank's last policy meeting, where it had cut its lending rates

by 50 basis points.

South Africa's rand rose 0.4% against the dollar as

prices of gold firmed, while shares in Johannesburg

added 0.9%.

Emerging market assets, generally considered as risky,

enjoyed firm gains amid rising hopes the Fed could cut its

lending rates this year following soft jobs reports last week

and on Thursday.

However, EM debt recorded weekly outflows of $700 mln in the

week to Wednesday, while stocks saw $600 mln of outflows, Bank

of America said in a weekly note.

Investors also kept tabs on global geopolitical risks, with

Philippines calling for expelling Chinese diplomats as the South

China Sea row escalated.

HIGHLIGHTS:

** Turkey unemployment dips to 8.6% in March, back at

October low

** Taiwan rattled by 5.8 magnitude earthquake, no immediate

reports of damage

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