CNB's Prochazka Signals Preference For Unchanged Pace Of Easing

EUR/CZK ticked higher as Bloomberg ran headlines with comments from CNB's Jan Prochazka, who said that the central bank will likely continue to cut rates by 50bp per meeting. The move was relatively insignificant, however, with price action contained to a fairly narrow range. When this is being typed, EUR/CZK trades +0.030 at 25.284.

• Prochazka told Bloomberg that hawkish signals from the Fed and persistent inflationary risks prevent the CNB from accelerating its rate-cutting cycle. On the other hand, he suggested that there are no strong signals from the economy that could persuade the CNB to reduce the pace of monetary easing.
• Meanwhile, CZGB yields have declined across the curve, with belly outperforming. Broader strength across the FI space exerts pressure to local yields, with Czech FRAs faltering as well.
• From a technical perspective, bulls need EUR/CZK to return above the 50-DMA (25.317) before setting their sights on Feb 15 high of 25.519. Bears look for a dip through the round figure of 25.000.