INSTANT VIEW 2-Czech May C/A deficit drops faster than fcast

...following a 16.79 billion deficit a month 
earlier, data showed on Friday. 
    The 12-month rolling deficit narrowed slightly to 116.7 
billion crowns, or 3.6 percent of last year's gross domestic 
product (GDP) according to Reuters calculations, from 112.4 
billion crowns a month earlier. 
 
 KEY POINTS: 
(CZK billions)           May         April          May forecast 
Current Account          -5.35      -16.79          -9.00 
Financial Account        11.32        6.45           n/a 
Net Direct Investment    11.54       12.52           n/a 
 
 (For full table, double click on..................[nPRA001395] 
 
- The monthly deficit is mainly due to a 14.84 billion crown 
deficit in the income balance caused by payments of dividends 
and estimated direct investment reinvested earnings. This was 
lower deficit than 23.16 billion in April. 
- Foreign direct investment inflows total 12.25 billion crowns, 
which the central bank estimated included about 9.46 bilion 
crowns in reinvested profits. 
- Portfolio investments show a net 1.95 billion crown inflow. 
 
 COMMENTARY: 
    MICHAL BROZKA, ANALYST, RAIFFEISENBANK, PRAGUE: 
    "Overall the balance of payments has been developing better 
than expected this year. However, I do not expect a significant 
reaction of the crown to the data. Its exchange rate has been 
driven by carry trades and the interest rate differential. If it 
was driven by fundamentals, it would be stronger now at around 
28.0 to the euro." 
     
 MARKET REACTION: 
    Crown little changed at 28.27 to the euro  from 
28.275 ahead of the data, following a rally in the past week. 
     
 BACKGROUND: 
- Analyst expectations before data release       [ID:nL02337062] 
- Czech May foreign trade figures                [ID:nL09337680] 
- Polish April C/A                               [ID:nL15775121] 
- Slovak April C/A gap                           [ID:nLPRG000399 
- Hungary's Q1 C/A gap                           [ID:nBUD002062] 
- Report on last Czech c.bank rate decision      [ID:nPRG000403] 
                                 [ID:nL10648783] [ID:nL28398864] 
 
 LINKS: 
- For further details on May of payments numbers and past data, 
Reuters 3000 Xtra users can click on the Czech National Bank's 
website: 
    http://www.cnb.cz/en/statistics/bop_stat/ 
 
- For LIVE Czech economic data releases, click on        
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- For Czech money markets data click on                 
- Czech money guide                                       
- Czech benchmark state bond prices                    
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