INSTANT VIEW 2-Slovak Nov EU-norm CPI above mkt fcasts

    Slovak consumer prices rose 
0.5 percent month-on-month in November, according to EU-norm 
data, putting the annual inflation rate at 3.7 percent, data 
from the Statistics Office showed on Friday. 
     
SLOVAK EU-NORM INFLATION       NOV 06        OCT 06      NOV 05 
  pct change mo/mo             +0.5           0.0         0.0 
  pct change yr/yr             +3.7          +3.1        +3.6 
   
- Analysts surveyed by Reuters had expected EU-norm 
inflation to have risen by 0.3 percent month-on-month, and 3.4 
percent year-on-year in November. 
- Food and non-alcoholic beverages, which have a strong 
weighting in the consumer price basket, rose by 0.9 percent 
month-on-month, after a 0.2 percent drop in October. 
- Housing, water, electricity, gas and other fuels, which 
pushed inflation up early this year, rose by 1.6 percent on the 
month in November, after a 0.6 percent growth in October. 
- Annual price growth in the housing category, which has the 
strongest weighting in the consumer basket, was 9.2 percent, up 
from 7.8 percent rise in October. 
- Transportation prices fell by 0.6 percent month-on-month, 
after a 1.7 percent drop in October. 
     
    ANALYSTS' COMMENTS: 
    LUCIA STEKLACOVA, SENIOR ANALYST, ING BANK, BRATISLAVA 
    "It's only slightly higher than we had expected. We think 
that November inflation data will not influence the decision 
making on interest rates next week." 
    "The key factor to keep interest rates unchanged should be 
the currency's rally, which has tightened monetary conditions 
and contributed to a positive inflation outlook for the next 
year." 
     
    JURAJ VALACHY, ANALYST, TATRA BANKA 
    "The figure is in line with the already released national 
index. The biggest factor behind the rise was the increase in 
natural gas prices and surprisingly high growth in food prices. 
On the other hand, lower fuel prices were taming the rise." 
    "The surprise was not big enough to make the central bank 
hike interest rates. We expect rates to remain stable due to a 
very strong crown ... and also inflation outlook for the next 
year is better than expected." 
     
    MARKET REACTION: 
    The Slovak crown showed no reaction to the release, trading 
at 34.770 per euro , unchanged from Thursday's close. 
It hit a record high of 34.620 on Wednesday, but retreated to 
weaker levels after the central bank's verbal intervention. 
     
    BACKGROUND: 
 - The central bank follows inflation calculated by the 
EU methodology as a part of Slovakia's plan to adopt the euro in 
2009. 
 - Financial markets follow local-standards inflation more 
closely because it is released earlier and shows only minor 
differences from EU-norm data. Prices under the local 
methodology rose by 0.6 percent on the month and by 4.3 percent 
year-on-year in November. 
 - The central bank expects annual EU-norm inflation at 3.7 
percent in December, above the year-end target of 2.5 percent. 
 - Slovakia wants to meet all criteria for euro adoption in 
2008. The central bank predicts inflation will fall to 2.8 
percent at the end of 2007. 
 - The central bank left the key two-week repo rate unchanged at 
4.75 percent in November. 
     
    LINKS: 
- For further details on November 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 ................................ 
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- Slovak forward money market rates .................... 
 
 

[BRATISLAVA/Reuters/Finance.cz]