INSTANT VIEW 1-Czech July PPI ebbs from two year high

...costs to ebb 
to 4.1 percent from a 2-year high of 4.6 percent the previous 
month. 
**************************************************************** 
KEY POINTS: 
(change in percent)       July       June      July forecast 
 month/month              0.2        0.7        0.4 
 year/year                4.1        4.6        4.4 
 
 (For full table of data...........................[nPRA001439]) 
 
COMMENTARY: 
    DAVID MAREK, CHIEF ANALYST, PATRIA FINANCE, PRAGUE 
    "I think it is important to note that this is the third 
number in a row favouring a slower pace of interest rate 
increases from here. 
    "This month, we have received lower than expected CPI, 
industrial output and now it is PPI, which seems to suggest that 
inflation pressures do exist in the economy but probably they 
are not as strong as to warrant an interest rate increase as 
early as this month. A hike may be more likely to come only in 
September or October." 
 
MARKET REACTION: 
- Crown a tad softer at 28.015 per euro  from 28.005 
just before the data release. 
 
BACKGROUND: 
- Industrial PPI and agriculture producer prices are watched 
closely by the markets as leading indicators for consumer 
inflation which is targeted by the Czech central bank (CNB). 
- """However, analysts have pointed out the pass-through of 
changes in production costs into overall consumer prices has 
been limited recently""". 
 
- July consumer inflation                        [ID:nL08620278] 
                                 [ID:nL08145120] [ID:nPRA001429] 
- June industrial output figures                 [ID:nL13698020] 
- Report on last Czech c.bank rate decision      [ID:nPRA001407] 
 [ID:nPRA001420] [ID:nL03817639] [ID:nL26800751] [ID:nL03732730] 
 
LINKS: 
- For further details on July producer prices and past data, 
Reuters 3000 Xtra users can click on the statistical bureau's 
Website: 
    http://www.czso.cz/eng/csu.nsf/kalendar/2004-ipc 
 
- For LIVE Czech economic data releases, click on        
- Instant Views on other Czech data                 [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                       
 
  
  Keywords: CZECH ECONOMY/PRICES  
    

[PRAGUE/Reuters/Finance.cz]