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Needle Still Points South


Yields Bounce as Equities Make New Monthly Highs


Heading North


Bull Rally Accelerates


Economists Survey Raises 2021 CPI Forecast To 4.9%


  • Last week, opposition parties failed to remove PM Babis from power after it was reported that only 89 of the opposition lawmakers voted (which was well below the 101 voted need in the 200-seat lower house).
  • The market has not been very sensitive to that narrative and traders have been chasing the CZK momentum in the past few weeks as CNB prepares for a tightening cycle.
  • This morning, economic data showed that unemployment rate fell to 3.9% in May, down from 4.1% in June. In addition, construction output fell 3.9% YoY in April and Foreign Trade surplus rose to 19.3bn CZK.
  • USDCZK ticks lower this morning after failing to break above its 21 resistance on Friday; next resistance to watch on the topside stands at 21.22, followed by 21.34 (50D SMA). On the downside, first support stands at 20.72.
  • Czech 10Y yield has remained flat at around 1.68% in the past week and is currently trading below its 100D SMA (1.70%), next support to watch on the downside stands at 1.60%.
  • Czech currently offers one of the lowest 10Y real yields among the EM world at -1.42%.
  • Next CPI print (for May) is coming out on June 10.
MNI London Bureau | +44 203-865-3850 |
MNI London Bureau | +44 203-865-3850 |