INSTANT VIEW 4-Czechs post trade surplus for 6th straight month

...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: 
    VIKTOR KOTLAN, CHIEF ECONOMIST, CESKA SPORITELNA, PRAGUE 
    "For the full year, we expect a 66 billion crown surplus and 
are a little more optimistic than the market median forecast of 
a 60 billion surplus. 
    "The numbers are as expected and are having no impact on the 
crown. It is sticking to a range of between 28.0 and 28.3 per 
euro. From a technical point of view, we rather expect a 
short-term weakening." 
 
    JIRI SKOP, ANALYST, KOMERCNI BANKA, PRAGUE 
    "The June foreign trade result is no surprise for markets. 
The crown cannot be expected to react to the data, it is rather 
driven by global credit market developments and risk aversion, 
which impacts on carry trades. 
    "So far our long-term estimate of a full year 2007 foreign 
trade surplus of 59 billion crowns is being confirmed." 
 
    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, the 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 the 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 (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 0723 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]