...following a 7.4 billion surplus in June 2006. ************************************************************** KEY POINTS: (in bln CZK) June May June fcast balance 9.32 6.92 9.5 (nominal y/y change in pct) exports 14.5 12.8 n/a imports 14.0 10.3 n/a (For full table of trade data, click on........[nPRA001425]) - According to seasonally-adjusted preliminary data, exports rose 2.5 percent in June from May while imports rose 1.9 percent month-on-month. - The trade balance improved thanks to a 2.2 billion crown year-on-year rise in the surplus in machinery and transport equipment trade and a 1.2 billion crown decline in the mineral fuels trade deficit. - In euro terms, exports rose 13.8 percent and imports by 13.4 percent year-on-year in June, lagging the rise in local currency terms because of a previous weakening in the crown. COMMENTARY: RADOMIR JAC, CHIEF ANALYST, PPF ASSET MANAGEMENT, PRAGUE "As expected, Czech foreign trade benefited from positive seasonal factors in June: export activity is usually strong before the summer holiday season. Furthermore, in year-on-year comparison, foreign trade balance has been improving due to cheaper imports of mineral fuels and growing exports of machinery and transport equipment, which is also in line with the previous trend. "We expect foreign trade surplus to reach CZK 70 billion this year, which would be a hefty improvement compared to a 43 billion surplus recorded a year ago. The crucial question, however, is: will the Czech crown be able to benefit from the positive foreign trade data? If the crown remains unimpressed and July data for inflation show further acceleration of the annual inflation tomorrow (on Wednesday), the likelihood of the Czech central bank raising interest rates already at its August board meeting would increase." MARKET REACTION - Crown flat at 28.075 per euro by 0712 GMT. BACKGROUND: - Market expectations before release [ID:nL01772578] - Slovak May trade figures [ID:nL12624316] - Polish trade in May [ID:nL13175766] - Hungary's May trade data [ID:nBUD002094] - Report on last Czech c.bank rate decision [ID:nPRA001407] [ID:nPRA001420] [ID:nL03817639] [ID:nL26800751] [ID:nL03732730] - For further details on June 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] - 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
[PRAGUE/Reuters/Finance.cz]