INSTANT VIEW 1-Czech May PPI rises to 2-yr high, exceeds fcast

...rate of growth in factory gate costs to edge 
up to a 2-year high of 4.1 percent. 
    The quickening rise in the underlying inflation measure was 
likely to bolsted the market's view that the central bank (CNB) 
could raise interest rates as early as July following the first 
hike in 8 months in May. 
 
KEY POINTS: 
(change in percent)       May        April      May forecast 
 month/month              0.6        0.6        0.4 
 year/year                4.1        3.7        3.8 
 
 (For full table of data...........................[nPRA001352]) 
 
- The statistics office says a 3.6 percent monthly gain in coke 
and crude oil refinery costs, a 0.8 percent rise in basic metals 
prices, and a 0.4 percent up-tick in food, beverages and tobacco 
products are the main driving forces of the monthly PPI 
increase. 
- Separately, the statistical bureau said agriculture producer 
prices rose 0.3 percent in May from April for a 12.1 percent 
year-on-year rise, down from a 12.5 percent gain a month ago. 
 
BACKGROUND: 
- Industrial PPI and agriculture producer prices are watched 
closely by the markets as leading indicators for consumer 
inflation which is targeted by the Czech central bank (CNB). 
- However, analysts have pointed out the pass-through of changes 
in production costs into overall consumer prices has been 
limited recently. 
 
- May consumer inflation                         [ID:nL08529664] 
                                                 [ID:nL08216043] 
- April industrial output figures                [ID:nL12369927] 
- Report on last Czech c.bank rate decision      [ID:nPRA001319] 
                                 [ID:nL31276683] [ID:nL31320495] 
 
LINKS: 
- For further details on May producer prices and past data, 
Reuters 3000 Xtra users can click on the statistical bureau's 
Website: 
    http://www.czso.cz/eng/csu.nsf/kalendar/2004-ipc 
 
- For LIVE Czech economic data releases, click on        
- Instant Views on other Czech data                 [CZ/INSTANT] 
- Overview of Czech macroeconomic indicators            [CZ/ECI] 
 
- Key data releases in central Europe    [CEE-CONVERGENCE-WATCH] 
- For Czech money markets data click on                 
- Czech money guide                                       
- Czech benchmark state bond prices                    
- Czech forward money market rates                       
 
  
  Keywords: CZECH ECONOMY/PRICES