INSTANT VIEW 2-Slovak Oct CPI above market forecasts

...on 
Monday. 
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KEY POINTS: 
SLOVAK HEADLINE CPI      OCT 07     SEPT 07 FCASTS 
  pct change mo/mo       +0.6          +0.2 
  pct change yr/yr       +3.3          +2.8 
     
(for full table please click ............ [ID:nBSD000055]) 
     
- October core inflation rate, which excludes the impact of 
changes to state-regulated prices and excise taxes, rises 0.7 
percent month-on-month, compared with the market forecast of a 
0.3 percent increase. 
- Housing, water, electricity, gas and other fuel prices are up 
0.1 month-on-month in October, after staying flat in September. 
- Prices of food and non-alcoholic beverages jump 2.6 percent on 
the month in October, after a 1.0 percent increase in September. 
- Transportation prices, influenced mainly by oil costs, are 
flat on the month in October, after a 0.1 percent drop in 
September. 
     
ANALYST COMMENTS: 
    JURAJ VALACHY, ANALYST, TATRA BANKA, BRATISLAVA 
    "This figure was influenced by several factors, with food 
price growth the dominant one. There was also a relatively 
strong rise in health care services." 
    "There is still room for prices of milk products to go up in 
the coming months." 
    "There is still nothing serious happening regarding the 
Maastricht criterion for inflation, as inflation has risen also 
in other countries. The central bank will do nothing with 
interest rates and follow the ECB's moves." 
     
MARKET REACTION: 
- The Slovak crown eased slightly after the inflation data, 
trading at 32.980 to the euro  as of 0810 GMT, compared 
with 32.950 earlier in the session. 
     
BACKGROUND: 
- Inflation data were calculated according to domestic 
methodology. 
- The central bank (NBS) sets its goals according to inflation 
calculated under the EU-harmonised consumer price index as part 
of Slovakia's goal to adopt the euro in 2009. 
- The Statistics Office will release EU-norm inflation data for 
October on Nov. 15. 
- The market followed local inflation data in the past because 
of their earlier release, but analysts have started to pay more 
attention to statistics by EU-methodology after the two figures 
began to show wider differences earlier in 2007. 
- Slovak inflation accelerated in 2005 and 2006 due to hikes in 
natural gas and heating prices for households. 
- But price growth slowed at the start of 2007 partly due to 
government pressure on utilities. 
- The central bank, which cut its key two-week repo rate by 25 
basis points to 4.25 percent in March and April, held rates 
steady for the sixth month in a row in October. 
     
LINKS: 
- For further details on October inflation and other past data, 
Reuters 3000 Xtra users can click on the Slovak Statistics 
Office's website: 
    http://wwww.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 .................... 
   (Reporting by Peter Laca and Martin Dokoupil; editing by 
David Stamp) 
    
  Keywords: SLOVAKIA INFLATION/  
    

[BRATISLAVA/Reuters/Finance.cz]