INSTANT VIEW 2-Slovak July PPI 0.5 pct m/m, above forecasts

...Statistics Office said on Tuesday. 
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KEY POINTS:   
PRODUCER PRICES              JULY 07    JULY 07 FORECASTS 
pct change month/month        +0.5           +0.2 
pct change year/year          +1.3           +1.0 
   
  (Full table of July PPI data ........ [ID:nPRG000470])   
   
 - July annual producer price inflation rate matches the 8-1/2 
year low seen in June and May. 
 - Among the three PPI categories, prices of industrial products 
rise by 0.5 percent on the month in July, after a 0.3 percent 
rise in June. 
 - Prices of electricity, gas, steam and hot water are up 0.5 
percent month-on-month, after a 0.2 percent rise in June 
 - Prices of raw materials rise by 0.1 percent in July, after a 
1.3 percent increase in June. 
 - Within industrial products, refinery goods prices accelerate 
by 1.5 percent month-on-month, after a 1.8 percent rise in June. 
 - Prices of metals and metal products rise by 2.4 percent on 
the month, after 0.2 percent increase in June. 
     
    ANALYST COMMENTS: 
    MIROSLAV FRAYER, ANALYST, KOMERCNI BANKA, PRAGUE 
    "The data showed a surprising monthly rise in prices of 
metal and metal goods, as well in electricity prices." 
    "Annual inflation rate remained stable, and inflation trend 
is still favourable." 
    "PPI does not have a direct impact on monetary policy 
setting. We expect the Slovak central bank to keep interest 
rates steady at today's meeting, and by the end of the year, 
despite the risk that rising agriculture prices could push 
consumer inflation up." 
     
    PIOTR MATYS, ANALYST, 4CAST, LONDON 
    "Despite clear signs that inflationary pressure starts to 
build up in PPI, it will not have an impact on NBS (central 
bank) policy since the pass-through effect on CPI (consumer 
price inflation) in limited." 
     
    MARKET REACTION 
    The Slovak crown was little changed after PPI data, trading 
at 33.750 per euro  as of 0715 GMT, versus 33.765 early 
in the session. 
     
   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 will hold its monthly monetary policy 
meeting later on Tuesday, and the market widely expects the 
monetary body to keep the main two-week repo rate flat at 4.25 
percent for the fourth consecutive month. 
     
    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   
- For LIVE Slovak economic data releases, click on...... 
- Schedule of upcoming indicator releases............ 
- Summary of short-term economic data forecasts...... 
- Stories on Slovak currency moves........................[SKK/] 
- Slovak speed money guide .............................. 
- Slovak benchmark state bond prices ................. 
- Slovak forward money market rates .................... 
 
 

[BRATISLAVA/Reuters/Finance.cz]