INSTANT VIEW 3-Czech Nov PPI rises 0.4 pct m/m

                                
 PRAGUE, Dec 15 (Reuters) - Czech industrial producer prices
rose by 0.4 percent in November from October, showing an annual
decline of 2.4 percent, data showed on Tuesday.
                                
 It was better than analysts' expectations of flat
month-on-month industrial PPI and a shallower drop than the
year-on-year drop of 2.7 percent estimated by analysts.
                                
 Producer prices showed the first monthly growth since
August.
                                
 In October, producer prices dropped 4.6 percent year on
year.
                                
 The statistics bureau said agricultural producer prices
slipped 0.2 percent on the month, and showed a 16.0 percent
year-on-year drop, a slowdown from a 19.3 percent fall in
October.
****************************************************************
KEY POINTS:
(change in percent)        Nov        Oct        Nov forecast
 PPI
 month/month              +0.4       -0.2        0.0
 year/year                -2.4       -4.6       -2.7

(For full table of data........................[ID:nPRA004893])

- Prices of coke and refining product rose 6.0 percent from
October.
- Prices of chemicals and chemical products rose 0.6 percent on
the month and metal product prices rose 0.2 percent.
- Food prices fell by 0.2 percent month on month.
- Construction works prices were unchanged on the month and grew
0.2 percent year-on-year.
- Prices in the service sector dipped 0.1 percent on the month
and rose 0.9 percent year on year due to a rise in advertising
prices.
                                
 
                                
 COMMENTARY
                                
 JIRI SKOP, ECONOMIC & STRATEGY RESEARCH, KOMERCNI BANKA
                                
 "The industrial price growth was mainly due to growth in the
coking and refining products segments. This group is strongly
influenced by the volatile oil price and so are fuel prices, as
part of the consumer index.
                                
 "Although industrial prices grew faster than expected, we do
not see any implications from the monetary policy point of view.
                                
 "Agriculture price development is more interesting from (the
monetary policy) perspective as they have an impact on future
food prices. These prices fell in line with seasonality. They
still do not show that food prices should show any significant
growth in the near term."
                                
 
                                
 MICHAL BROZKA, ANALYST, RAIFFEISENBANK
                                
 "Industrial prices are still very low but thanks to (them)
leaving the deflation area is another argument for not cutting
interest rates.
                                
 "We will probably have to wait until the second quarter of
2010 for PPI to return in the inflation area."
                                
 
                                
 DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
                                
 "The better than forecast result was mainly due to oil, and
oil prices consequently hiked prices of refining products.
                                
 "I think this is an argument that will support a view of
stable rates (at the rate setting meeting on Wednesday).
                                
 "Deflation in producer prices turned into inflation and the
annual deflation is moderating and will be weakening, this plays
in favour of stable rates for some time going forward."
                                
 
                                
 MARKET REACTION: The crown <EURCZK=> weakened to 26.08 per
euro from 25.98 before the data release.
                                
 
                                
 
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).

- November consumer inflation                    [ID:nGEE5B806Y]
                                
                                              [ID:nGEE5B80EW]
- October industrial output figures               [ID:nLG432293]
                                
                                               [ID:nDE5BD06Z]
- Report on last Czech c.bank rate decision.......[ID:nL4183884]
                                
 [ID:nPRG003761] [ID:nL5208270 [ID:nL5527536] [ID:nPRA004836]

LINKS:
- For further details on November 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>
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- 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 Jana Mlcochova)