Czech crown sets new high on upside CPI surprise

...sharper rise in inflation than both the market and the central bank expected.

Consumer prices rose by 0.9 percent in November from October, more than double the market forecast, to lift the annual inflation rate to a six-year high of 5.0 percent [ID:nL10470437].

The crown rose as high as 26.060 per euro , beyond the previous all-time peak of 26.070 set last week. Short-dated forward-looking money market rates (FRA) gained as much as 11 basis points across the curve.

"From the central bank's point of view, today's number is a confirmation of the path towards monetary policy tightening, which however needs to be very deliberate given the (firm) crown," said Petr Dufek, analyst at CSOB Bank in Prague. (Reporting by Marek Petrus, editing by Mike Peacock)

---------------------- MARKET SNAPSHOT ------------------------ Crown Currency Latest Prev Pct change Pct change

close on day in 2007 vs Euro 26.070 26.110 +0.15 +5.49 vs Dollar 17.780 17.802 +0.13 +17.10

Equities PX Index 0,000.0 1,842.7 +0.00 -100.00

Domestic Govt Bonds Latest Prev Yld change Yld change

close on day in 2007

5Y Yield 4.31 4.31 +0 bps +105 bps 10Y Yield 4.63 4.57 +6 bps +88 bps

Mid Yield Spreads (in bps) Spd change Spd change

on day in 2007

5Y vs +31 +0 -1 +95 10Y vs +44 +38 +6 +68 --------------------------------------------------------------- All data taken from Reuters at 0818 GMT. Currency percent change and yield change calculated from prior domestic close at 1500 GMT.

Keywords: CZECH ECONOMY/INFLATION MARKET

[PRAGUE/Reuters/Finance.cz]