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10Y Yield Gradually Approaching its 2.66% Resistance

CZECHIA
  • This morning, economic data showed that PPI inflation accelerated to 13.5% in November, its highest level in 29 years.
  • Yesterday, it was confirmed that all seven CNB policymakers will attend the December 22 rate meeting.
  • EURCZK ticks higher this morning after finding support slightly above the 25.20 level; a break below that level would have opened the door for a move down to 25. On the topside, first resistance to watch stands at 25.43 (100DMA).
  • Monetary policy divergence between CNB and ECB could continue to support the CZK (over Euro) in the medium term.
  • Czech 10Y yield has been retracing sharply higher in recent days following CNB governor Rusnok’s comments on the terminal rate (closer to 4% than 3%). The 10Y yield broke above the 2.6% level yesterday and is approaching its ST resistance at 2.66%. On the downside, support to watch now stands at 2.50% (50DMA).

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