INSTANT VIEW 2-Czechs post CZK 6.92 bln May trade surplus

...following a 2.23 billion surplus in May 
2006. 
 
KEY POINTS: 
(in bln CZK)           May       April         May fcast 
 balance               6.92       3.00         4.8 
(nominal y/y change in pct) 
 exports              12.8       19.7          n/a 
 imports              10.3       16.8          n/a 
 
 (For full table of trade data, click on........[nPRA001384]) 
 
- According to seasonally-adjusted preliminary data, exports fall 
0.6 percent in May from April while imports rise 0.9 percent 
month-on-month. 
- The trade balance improves due to a smaller mineral fuels 
trade deficit and a swing into a surplus in the trade with 
industrial consumer goods. 
- In euro terms, exports rise 12.9 percent and imports by 10.5 
percent year-on-year in May, outpacing the dynamics in local 
currency terms because of a previous firming in the crown. 
 
 COMMENTARY: 
    JAN VEJMELEK, HEAD OF ECONOMIS AND STRATEGY RESEARCH, 
KOMERCNI BANKA, PRAGUE: 
    "The May result did not meet our expectation -- the most 
optimistic in the market -- but still it is a pleasant surprise. 
    "In the past two quarters, the improvement has been mainly 
an issue of terms of trade. The contribution of net exports to 
GDP growth has been negative since the fourth quarter 2006. 
    "A better foreign trade result is good news for the crown. 
However, we do not expect a significant reaction. The crown has 
been determined mainly by the interest rate differential." 
     
    ALES MICHL, ANALYST, RAIFFEISENBANK, PRAGUE 
    "The risks to the forthcoming developments are balanced. On 
the one hand, crude oil has become more expensive, on the other 
hand, the European economy is showing its best performance in 
the last six years. 
    "We do not see any significant reaction of the crown versus 
the euro. It will probably remain stuck at weaker levels for the 
entire summer. 
    "It would be a big surprise if the Czech National Bank fails 
to increase interest rates by quarter of a percentage point at 
the end of July." 
 
MARKET REACTION: 
- The Czech crown trades at 28.63 to the euro  by 0715 
GMT after the data, marginally up from 28.64 earlier. 
 
BACKGROUND: 
- Market expectations before release             [ID:nL02337062] 
- Slovak April trade figures                     [ID:nL11663635] 
- Polish trade in April                          [ID:nL15775121] 
- Hungary's April trade data                     [ID:nBUD002034] 
- Report on last Czech c.bank rate decision      [ID:nPRG000403] 
                                                 [ID:nL28398864] 
 
- For further details on May 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 
 
- For LIVE Czech economic data releases, click on        
- Instant Views on other Czech data click on        [CZ/INSTANT] 
- Overview of Czech macroeconomic indicators            [CZ/ECI] 
 
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- For Czech money markets data click on                 
- Czech money guide                                       
- Czech benchmark state bond prices                    
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