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August Inflation Accelerates To 4.1%

CZECHIA
  • Czech inflation accelerated to 4.1% YoY in August (vs. 3.6% exp.), up from 3.4% the previous month.
  • CZK is broadly stronger following CPI print as speculation over a 'bigger than 25bps' hike is rising.
  • Last week, CNB Governor said in an interview that he 'cannot rule out' a bigger than 25bps hike in the coming meetings if the central bank's new inflation forecast indicates that such move is needed.
  • Next CNB meeting is on September 30; the market is currently pricing in another 25bps hike (its third consecutive hike), which would bring the policy rate to 1%.
  • However, the outcome could change in the coming weeks if policymakers start to sound more 'hawkish', which could strengthen the momentum on CZK.
  • At 12pm (London time): Central bank comments on CPI data.

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