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Industrial Production Falls More Than Expected In October

CZECHIA
  • At 10am (London time), President Milos Zeman meets nominee for foreign minister Jan Lipavsky as part of consultations with candidates for future cabinet members (BBG).
  • This morning, economic data showed that the industrial output fell more than expected in October by 7.4% YoY (vs. -6.8% exp.), down from -4% the previous month.
  • Foreign Trade deficit came in bigger than expected at -18.2bn CZK (vs. -14.5bn exp.), down from revised -15bn CZK.
  • We have seen recently that sentiment indicators have been falling in recent months amid rising uncertainty over the economic outlook.
  • CNB chief economist Petr Kral said in a recent interview that the CNB will continue its tightening cycle despite rising uncertainty and expects the terminal rate to exceed the so-called ‘neutral’ level in the end of the cycle.
  • Kral added that the widening interest rate differential should benefit the CZK (relative to EUR) and therefore help tame inflation.

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