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ING Expecting a 50bps Hike With Risks Skewed to Upside

CZECHIA
  • ING expects the CNB to raise its key rate by 50bp next week, but the latest GDP data raises the odds of a 75bp hike.
  • The new forecast will show significant rate cuts in 2H22, which will be challenging for the Board's communication.
  • Although ING does not expect the first cut until the middle of next year at the earliest, it will be the main story for the market this year.
  • . A reassessment of market expectations for faster rate cuts will be negative news for the koruna, though on the other hand, it may be supported by questions about possible central bank intervention and FX reserve sales.

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