INSTANT VIEW 2-Slovak Nov PPI above mkt forecasts

    Slovak producer prices rose 
0.4 percent month-on-month in November, above market 
expectations, putting the annual inflation rate for factory-gate 
costs (PPI) at 5.6 percent, data showed on Wednesday. 
 
PRODUCER PRICES              NOV 06      OCT 06      NOV 05 
 pct change month/month       +0.4       +0.1         +1.8 
 pct change year/year         +5.6       +7.1         +7.4 
 
- Analysts polled by Reuters had forecast a producer price index 
rise of 0.1 percent month-on-month in November, and an annual 
rate of 5.4 percent  . 
- Of the three PPI categories, prices of industrial products 
fall by 0.3 percent on the month, after a 0.4 percent drop in 
October. 
- Prices of electricity, gas, steam and hot water rise by 1.0 
percent, month-on-month, after a 0.8 percent growth in October. 
- Prices of raw materials rise by 0.6 percent, after being flat 
in the previous month. 
- Within industrial products, refinery goods down by 2.7 
percent month-on-month, after a 6.7 percent drop in October. 
 
ANALYST COMMENTARY 
    NICHOLAS KENNEDY, ANALYST, 4CASTWEB, LONDON 
    "The result is not significantly above expectations and 
confirms a continued moderation in PPI from May's high of 9.9 
percent year-on-year and is supportive of our expectations that 
the NBS (central bank) will remain on hold.  
    "Unlikely to have a major impact on the market today, with 
regional FX the more likely focus after Hungary's Moody's 
downgrade late on Friday sent EUR/HUF higher. Liquidity also 
likely to remain thin given that many trading desks will remain 
on skeleton staff until the new year." 
 
BACKGROUND: 
- Slovak producer prices have shot up this year mainly due to 
the higher cost of oil and natural gas. 
- Accelerating PPI has coincided with rising consumer inflation, 
which prompted the central bank to raise interest rates by 175 
basis points in four steps this year. 
- But the central bank has held rates steady since September 
after rising crown helped tame consumer inflation. 
- The bank said in December that inflation risks were not 
materialising, which may signal the end of the monetary policy 
tightening cycle, analysts said. 
- Slovakia needs to curb consumer price inflation by spring 2008 
to fulfil its goal of adopting the euro in 2009. 
   
LINKS: 
- For further details on November 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...... 
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- 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]