INSTANT VIEW 2-Czech Oct PPI at +1.9 pct y/y meets fcasts

    PRAGUE, Nov 14 (Reuters) - Czech industrial producer prices 
stagnated in October from September, cutting the annual index 
(PPI) to 1.9 percent in line with consensus market expectations. 
 
KEY POINTS: 
(change in percent)       Oct        Sept       Oct forecast 
 month/month              0.0       -0.2       -0.1 
 year/year                1.9        2.4        1.9 
 
 (For full table of data...........................[nPRA001030) 
 
- A 5.5 percent fall in crude oil refinery costs on lower global 
prices was offset by a 1.5 percent rise in chemicals prices, a 
0.5 percent increase in basic metals, and a 0.3 percent gain in 
food producers' costs. 
- Agriculture producer prices rose 0.1 percent in October from 
September to post a 1.9 percent year-on-year increase, down from 
a 4.2 percent annual gain a month earlier. 
 
COMMENTARY: 
    DAVID MAREK, CHIEF ANALYST, PATRIA FINANCE, PRAGUE 
    "Producer prices in the industrial sector, agriculture and 
services changed very little in October, and gave no reason to 
change expectations that the CNB (central bank) will be in no 
hurry to change interest rates given the current level of the 
crown's exchange rate." 
 
MARKET REACTION: 
- Crown a touch firmer on the day at 28.040 per euro <EURCZK=>, 
about 0.6 percent weaker from an all-time high of 27.875 posted 
last week. Government debt yields and money market rates mixed 
and little moved. 
 
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 in recent months. 
 
- Oct consumer inflation         [ID:nL08914052] [ID:nL08889199] 
- Sept industrial output figures                 [ID:nL08849213] 
- Report on last Czech c.bank rate decision      [ID:nL26548848] 
                                                 [ID:nPRA001007] 
LINKS: 
- For further details on Octoberr 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       <ECONCZ> 
- 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                <CZKVIEW> 
- Czech money guide                                      <CZK/1> 
- Czech benchmark state bond prices                   <0#CZBMK=> 
- Czech forward money market rates                      <CZKFRA> 
 
 ((Writing by Marek Petrus; Editing by Alan Crosby; 
prague.newsroom@reuters.com; Reuters Messaging: 
marek.petrus.reuters.com@reuters.net; +420 224 190 477)) 
  Keywords: ECONOMY CZECH PRICES