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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.
CZECHIA
- Earlier today, we saw that the IMF reviewed Czech GDP growth forecasts to the downside for this year and 2022.
- IMF now expects Czech economy to grow by 2.6% in 2021 and 3.5% in 2022, compared to 3.8% and 4.5% estimated previously (October projections).
- The new restrictions imposed by the government to limit the downside risk of a fourth wave of infections should lead to a significant downward revision in growth expectations.
- In addition, the sharp increase in ST rates is also pricing in a significant deceleration in the economic activity.
- This chart shows that the 2-year change in the Czech 2Y yield has strongly led the industrial production by 6 months (proxy for economic growth).
- The divergence we saw in 2016/2017 was 'offset' by the significant increase in Chinese liquidity (i.e. 'reflation' trade).
- With liquidity contracting in China and decelerating strongly in DM economies, risks are skewed to the downside.
Source: Bloomberg/MNI
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.
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