INSTANT VIEW 4-Czechs post first April trade surplus in 13 yrs

...April, ending in the black in that month for 
the first time in 13 years following a 1.4 billion shortfall in 
April 2006. 
 
KEY POINTS: 
(in bln CZK)          April      March       April fcast 
 balance               3.00    12.6 (12.4)     2.2 
(nominal y/y change in pct) 
 exports              19.7     14.5 (13.0)     n/a 
 imports              16.8     13.2 (11.8)     n/a 
 
 (For full table of trade data, click on........[ID:nPRA001330]) 
 
- According to seasonally-adjusted preliminary data, exports 
fall 1.4 percent in April from March while imports dip 0.1 
percent month-on-month. 
- The trade balance improves due to a bigger surplus in trade 
with machinery and transport equipment, which expands by 4.5 
billion crowns year-on-year. Exports in this area -- including 
passenger cars in particular -- are up 21.3 percent. 
- The monthly gap in mineral fuels narrows by 1.9 billion crowns 
year-on-year, reflecting about 40 percent fall in natural gas 
imports to their lowest since September 2005. 
- In euro terms, exports rise 21.9 percent and imports by 18.9 
percent year-on-year in April, outpacing the growth rates in 
local currency terms because of a previous firming in the crown. 
 
COMMENTARY: 
    RADOMIR JAC, CHIEF ANALYST, PPF ASSET MANAGEMENT, PRAGUE 
    "The results are pointing a picture of an economy enjoying 
both robust GDP growth and improving trade balance. 
Theoretically this is a very good mix for the Czech crown. 
    "Nevertheless, the Czech crown seems to be trapped by low 
interest rates as well as by the current negative sentiment on 
emerging markets currencies. 
    "Being roughly 1.5 percent weaker compared to the Czech 
central bank assumption, the exchange rate development supports 
the case for a further tightening of monetary policy in the 
Czech Republic -- and we do not expect the impact of foreign 
trade data to be strong enough to have any significant impact on 
the crown at the moment." 
     
    JAN VEJMELEK, HEAD OF ECONOMICS AND STRATEGY RESEARCH, 
KOMERCNI BANKA, PRAGUE 
    "The trend of a year-on-year improvement in the foreign 
trade balance remains intact ... (but) because the income 
balance deficit will be probably deeper, the overall current 
account of the balance of payments for April will end in a 
deficit.  
    "As a share of GDP, however, the situation is gradually 
improving. From a medium-term perspective, the crown should 
benefit from the (favourable) fundamentals. But it is difficult 
to find any reason for a firming of the crown at present on the 
basis of the data released today." 
     
    MICHAL BROZKA, ANALYST, RAIFFEISENBANK, PRAGUE 
    "The Czech crown should not react to the result. However, 
the overall positive development of foreign trade this year 
speaks in favour of a firming in the crown against the euro." 
 
MARKET REACTION: 
- Crown steady at 28.425 per euro  by 0716 GMT. 
 
BACKGROUND: 
- Market expectations before release             [ID:nL30315279] 
- Slovak March trade figures                     [ID:nL11266722] 
- Polish trade in March                          [ID:nL18174753] 
- Hungary's March trade data                     [ID:nL06431978] 
- Report on last Czech c.bank rate decision      [ID:nPRA001319] 
                                 [ID:nL31276683] [ID:nL31320495] 
 
- For further details on April foreign trade and other past 
data, Reuters 3000 Xtra users can click on the Czech Statistical 
Bureau's website: 
    http://www.czso.cz/eng/csu.nsf/kalendar/2004-vzo 
 
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