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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
- In an interview today, Czech policymaker Maker Benda said that she 'sees fewer rate hikes for 2021' than previously projected.
- Policymakers projected three rate hikes in their winter forecast.
- As for their CEE peers, Czech Republic was deeply affected by the third Covid wave and therefore market participants were starting to speculate less hikes for this year as CNB will aim to keep financial conditions loose for longer than expected to stimulate the economic recovery.
- The current median forecast expects CNB to rise its benchmark 2W repo rate to 0.50% by the end of the year (from 0.25% currently); some sell side firms have been pricing in up to two (25bps) hikes in the second quarter.
- Last week, CNB Governor Jiri Rusnok mentioned in an interview that policymakers' debate about monetary tightening will probably begin at the August meeting.
- This was mostly priced in by market participants and traders continue to chase the CZK as CNB will still be the first central bank to stat hiking rates in Europe this year.
- The chart below shows that USDCZK continues to test new lows (CZK is up 4.7% against the Dollar since its March 30 low); next key support to watch on the downside stands at 21.11, a break below that level would bring us to April 2018 lows. On the topside, first resistance to watch stands at 21.64 (100D SMA).
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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