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BOBL TECHS

(Z1) Needle Still Points South

BUND TECHS

(Z1) Bear Trend Sequence Intact

OIL

WTI Topples $75/bbl Handle

INDIA

Issuance Plan Eyed

FOREX

Commodity Related Currencies Bid

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  • Medium term trend on CZKPLN looks bullish as traders are chasing the monetary policy divergence between CNB and NBP.
  • While CNB is expected to raise its benchmark rate by another 25bps (to 0.75%) at the next meeting (August 5), the NBP has kept its interest rates low in order to stimulate the economic recovery.
  • Three out of the eight NBP policymakers sought to raise rates at the last meeting in June, implying that the majority (including governor Glapinski) is still aiming to keep financial conditions as loose as possible for the moment.
  • November inflation projections and July and August CPI inflation prints will be key for NBP policy outlook.
  • CZKPLN is gradually trading slightly below its key resistance at 0.18.
  • A break above that level would open the door for a move up to 0.1834, which represents the pair's all time high reached in December 2011.

Source: Bloomberg/MNI