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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CZECHIA
- Five parties, which won a combined majority in October elections, have agreed on a coalition pact that should form the basis for their joint government parties expect to sign the coalition government on November 8 (BBG).
- As CNB board seems to be very sensitive to the acceleration of inflation in recent months, an aggressive hike (75bps) is more likely at tomorrow's meeting (Nov 4) before slowing down the pace of the tightening cycle as business and economic sentiment indicators continue to deteriorate.
- We saw last week that the Czech 2Y10Y yield curve inverted, therefore increasing the odds of an economic downturn (see chart).
- On one hand, growing concerns over the inflationary pressures have led aggressive response from the CNB (75bps hike last meeting), levitating ST interest rates.
- On the other hand, the slowdown in the economic activity (with Czech government introducing new restrictions to limit the downside risk of a fourth wave of Covid infections) could lead to an increase in demand for LT bonds, therefore flattening the yield curve.
- Next important data to watch be October CPI print coming out on November 10.
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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