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CZK: Economic Confidence Improves, CNB Rate Decision Eyed Tomorrow

CZK
EM BulletCzech RepublicCentral and Eastern EuropeBulletGlobalEmerging Market NewsRegionCzechia

EUR/CZK last trades -0.008 at 25.129 after rejecting resistance from its 50-DMA (25.179). A clearance of that moving average would suggest that bullish momentum is building and a firmer reversal is on the table. Bears look for a dip through the 25.0 figure, which limited price action in Aug/Sep.

  • The CNB is widely expected to cut the two-week repo rate by another 25bp tomorrow, repeating its August decision, which would bring the policy rate to 4.25% and the cumulative amount of easing in this cycle to 275bp. At least three policymakers flagged this as the most likely outcome of this week's meeting, reinforcing market expectations. There is just one dissenter in Bloomberg's poll of analysts, who calls for a pause. For more details about the upcoming decision, please see our preview (click here).
  • All three measures of economic sentiment in Czechia topped median forecasts in September. Overall sentiment advanced to 97.0 versus 93.9 expected. Consumer confidence edged higher to 97.9, exceeding the 97.5 estimate, while business confidence climbed to 96.8, beating the 93.2 forecast.
  • The meeting between PM Fiala and Deputy PM Bartos failed to yield any significant announcements. Bartos confirmed that the Pirate Party remains part of the government, despite his resignation as party leader on the back of poor performance in regional elections.
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EUR/CZK last trades -0.008 at 25.129 after rejecting resistance from its 50-DMA (25.179). A clearance of that moving average would suggest that bullish momentum is building and a firmer reversal is on the table. Bears look for a dip through the 25.0 figure, which limited price action in Aug/Sep.

  • The CNB is widely expected to cut the two-week repo rate by another 25bp tomorrow, repeating its August decision, which would bring the policy rate to 4.25% and the cumulative amount of easing in this cycle to 275bp. At least three policymakers flagged this as the most likely outcome of this week's meeting, reinforcing market expectations. There is just one dissenter in Bloomberg's poll of analysts, who calls for a pause. For more details about the upcoming decision, please see our preview (click here).
  • All three measures of economic sentiment in Czechia topped median forecasts in September. Overall sentiment advanced to 97.0 versus 93.9 expected. Consumer confidence edged higher to 97.9, exceeding the 97.5 estimate, while business confidence climbed to 96.8, beating the 93.2 forecast.
  • The meeting between PM Fiala and Deputy PM Bartos failed to yield any significant announcements. Bartos confirmed that the Pirate Party remains part of the government, despite his resignation as party leader on the back of poor performance in regional elections.