August 08, 2022 07:44 GMT
- This morning, economic data showed that industrial output decelerated to 1.7% in June (vs. 2.3% exp.), down from 6.3% the previous month.
- We previously saw that the sharp tightening in financial conditions in the past year has been pricing in a significant deceleration in the industrial production (see chart).
- Last week, the CNB decided to keep its interest rates steady at 7% with 5 policymakers voting for rate stability.
- Governor Michl mentioned during his press conference that he sees ‘slight’ CZK weakening and the CNB will prevent excessive CZK moves.
- Michl also reiterated that inflation remains the ‘biggest problem’ in Czech economy.
- Economic data to watch this week will be CPI inflation, expected to accelerate to 17.9% in July, up from 17.2% the previous month.