INSTANT VIEW 2-Slovak PPI slightly above forecasts in June

...slightly above market expectations, 
the Statistics Office data showed on Friday. 
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KEY POINTS: 
 PRODUCER PRICES             JUNE 07    JUNE 07 FORECASTS 
 pct change month/month       +0.3           +0.1 
 pct change year/year         +1.3           +1.2 
(Full table of May PPI data ........ [ID:nPRG000432]) 
 
- Among the three PPI categories, prices of industrial products 
rose by 0.3 percent on the month in June, after a 0.1 percent 
drop in May. 
- Prices of electricity, gas, steam and hot water were up 0.2 
percent month-on-month, after a 0.2 percent decrease in May. 
- Prices of raw materials jumped 1.3 percent in June, after a 
0.3 percent rise in May. 
- Within industrial products, refinery goods prices surged by 
1.8 percent month-on-month, after a 1.0 percent rise in May. 
  
ANALYST COMMENTS 
LUCIA STEKLACOVA, SENIOR ECONOMIST, ING BANK, BRATISLAVA 
"The figures are slightly higher than expected, but I do not 
think they will have any significant hawkish implications, 
because the PPI is a secondary indicator for the central bank." 
     
MARKET REACTION 
- The Slovak crown was firmer after the release, hovering at 
around 33.440 per euro  as of 0715 GMT, compared with a 
three-week low of 33.565 per euro seen early in the session. It 
closed at 33.413 on Thursday. 
     
BACKGROUND 
- Slovak producer price inflation slowed at the beginning of 
2007 after the impact of last year's jump of energy prices 
faded. 
- Slowing PPI has coincided with falling consumer inflation rate 
this year. 
- Slovakia needs to keep consumer price inflation down to fulfil 
its goal of adopting the euro in 2009. 
- The central bank cut the main two-week interest rate by 25 
basis points in each March and April, as rising crown tightened 
monetary conditions and inflation outlook improved. It left 
borrowing costs unchanged in May and June. 
  
LINKS: 
- For further details on June producer prices, Reuters 3000 
Xtra users can click on the statistics office's website: 
    http://www.statistics.sk/webdata/english/index2_a.htm 
 
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