Free Trial
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.
CZK
EUR/CZK overnight implied volatility touched its highest levels since Aug 4 ahead of monetary policy decisions from the CNB, Fed and ECB. The move has been limited to the short end of the curve, with 1-week tenor also ticking higher to multi-month highs, while implied volatilities further out the curve remain subdued.
- Analysts are unanimous in expecting the CNB's Bank Board to leave the repo rate unchanged at 7.00% as five policymakers support continued interest-rate stability and are set to outvote the two hawkish dissenters again. Click here to see our preview of the decision.
- The Czech central bank will likely keep its existing FX regime in place. Although the need for interventions to prevent Koruna weakening has been reduced to zero in the past couple of months, the Board will likely want to keep that option in their toolkit as recessionary concerns linger.
- Market participants continue to bet on rate cuts later this year, albeit easing wagers have been slightly reduced over the past two weeks. Czech FRA 9x12 contracts last trade at 6.40%, which is above the 2023 low of 6.16%. CNB's Frait recently played down these bets, noting that at the moment he "wouldn't like to promise or signal anything like that."
- Spot EUR/CZK last deals -0.011 at CZK23.763 and a break under Jan 30, 2023/Oct 30, 2008 lows of CZK23.700/23.716 would open up room for further losses.
Fig. 1: EUR/CZK vs. EUR/CZK Overnight Implied Volatility
Source: MNI - Market News/Bloomberg
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.
We are facing technical issues, please contact our team.
ok
Your request was sent sucessfully! Our team will contact you soon.
ok