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Investors to Focus on Czech General Elections (Oct 8/9)

CZECHIA
  • Today, leaders of seven main political parties and coalitions will meet in election debate on public TV (BBG).
  • We recently saw that Czech Prime Minister Andrej Babis's ANO party looked the favorite to garner the most votes in this week's elevations, which is occurring on Oct 8/9. However, despite winning with 26%, the ANO party would have a hard time finding suitable coalition partners as its current partners are pooling at or below the 5-percent threshold to enter parliament.
  • Yesterday, economic data showed that unemployment rate decreased to 3.5% in September, down from 3.6% the pervious month.
  • Even though the political uncertainty may weigh on Czech asset prices in the short term, the market will continue to attribute more importance to the CNB tightening cycle.
  • The central bank is expected to continue its tightening cycle in the near term, with the debate now only focusing on the size and the frequency of future hikes.

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