2012.06.08 15:36:48 Finning to Raise C$125 Mln From 30-Year Bond Issue

By Gergo Racz BUDAPEST--Consumer price inflation will provide the week's main focus, with all three central European countries issuing figures for May. The Polish data, due out Wednesday, could offer hints about future monetary policy after this month's decision to keep borrowing costs unchanged. Economists expect inflation to drop to 3.9% from 4.0% in April, a Dow Jones Newswires survey found. Pekao economist Wojciech Matysiak said the drop is temporary and reflects low growth in food prices and falling fuel prices. "In the summer, prices will accelerate again." In Prague, Czech headline inflation is slowly easing but is expected to remain close to the upper limit of the central bank's 1%-3% target range through the end of the year, Raiffeisen said in a note. It expects a rate cut at the June 28 policy meeting. Komercni Banka said inflationary pressures may rise in coming months as the koruna continues to weaken. As for Hungary, CPI is expected to remain elevated at 5.6% in May, according to a Dow Jones Newswires poll of 14 economists. Because of new taxes announced by the government last month, the central bank is no longer sure its 3% mid-term CPI target will be reached next year. The National Bank of Hungary will publish its revised CPI forecast at the end of June. "Even if the CPI target is not achievable, we could still see base rate cuts, but only if there is predictability in the form of a package from the International Monetary Fund," Erste Bank analyst Zoltan Arokszallasi said. Erste now sees CPI at 4% next year, meaning the target will be out of reach. Expectations may be less grounded than in other months, warns 4Cast analyst Gabor Ambrus. "May is a typical surprise month. Because of unprocessed foods--mainly fruits and vegetables--there could be significant fluctuation in either direction," he said. Date GMT Country Indicator Period Forecast Previous Jun 11 N/A HUN Fiscal Council Finalizes Opinion on Budget Bill Jun 11 0700 CZE CPI May +3.0%YY(6) +3.5%YY Jun 11 1200 CZE Bond issuance calendar for July Jun 12 0700 HUN CPI May +5.6%YY(14) +5.7%YY Jun 12 0930 HUN 3-Month T-Bill Tender N/A 7.18%* Jun 13 1200 POL CPI May 3.9%(14) 4.0% Jun 13 1000 CZE 2023 floating rate bond auction N/A 85.697 bps** Jun 13 1000 CZE 2021 3.85% bond auction N/A 3.324%*** Jun 09 1200 HUN CB Minutes May N/A N/A Jun 15 1200 POL C/A April EUR845M(10) EUR228M Jun 15 1200 POL Trade Gap April EUR607M(8) EUR399M Jun 15 1000 CZE PPI May +1.6%YY(6) +2.2%YY Jun 15 1000 CZE Curr Acct Apr -CZK2.5B(5) +CZK16.8B Jun 17 0930 HUN T-Bond Tender N/A N/A Notes: Numbers in brackets indicate the number of analysts polled by Dow Jones Newswires. N/A indicates "not available" or "not applicable." Some amounts denoted as previous are rounded. * - Average auction yield. ** - Average discount margin at previous auction. *** - Average yield at previous auction. Veronika Gulyas in Budapest, Sean Carney in Prague and Patryk Wasilewski in Warsaw contributed to this report. Write to Gergo Racz at gergo.racz@dowjones.com (END) Dow Jones Newswires June 08, 2012 09:36 ET (13:36 GMT)