Regional elections winners are ODS and the coalition of four parties (4C). ODS won in seven of 13 regions, 24% of the total vote. 4C acquired 23% (won five regions). Surprisingly also Communists succeeded. They have got 21% of the total vote and won 1 region. Ruling party, ČSSD, achieved disappointing 15%.
In Senate elections, it is unlikely that ODS and ČSSD could win the 60% majority in the Senate. This majority is needed for constitutional changes.
Industrial prices increased by 1.2%, month-on-month, 5.9%, year-on-year (Patria Finance forecast: 1.1%, m-o-m, 5.9%, y-o-y). On a year-on-year basis, October prices of construction work rose by 4.4%, of agricultural producers by 11.5%, and of market services by 5.0%. The month-on-month increase in industrial producer prices was primarily contributed to by electricity prices. A switch to winter tariffs for electricity prices brought an increase of these prices by 15.2% and contributed to the 1.2% PPI increase by 0.9%. The rest of the PPI growth can be ascribed to price changes in manufacturing.
The FX market was flat on Monday and the Czech koruna did not react to the PPI figures released yesterday. The Czech koruna stood at 34.70 against euro and 40.15 against the dollar late Monday.
Bonds reacted surprisingly on disappointing PPI figures released on Monday. 1.2% m-to-m number sent prices down at first, however market recovered quickly and closed a fraction higher than closed on Friday. Tuesday retail sales probably will not be very important for bonds, could only give the market some level for some time.
Current benchmark prices: MoF 6.75/05 98.85-20 (+10 bps), MoF 6.30/07 93.80-10 (+5 bps), MoF 6.40/10 91.80-10 (+15 bps)
(David Marek and Dalimil Vyškovský)