MNI China Daily Summary: Wednesday, March 20

MNI BRIEF: PBOC To Facilitate Cross-border Financial Data Flow

MNI BRIEF: Swap Connect Quotas Currently Sufficient - PBOC

MNI: PBOC Conducts CNY3 Bln Via OMO Weds; Rates Unchanged

CHINA PBOC INJECTS CNY3 BILLION VIA 7-DAY REVERSE REPOS WEDS

MNI China Press Digest March 20: M&A, Consumer Rights, FDI

US MBA: REFIS -3% SA; PURCH INDEX -1% SA THRU MARCH 15 WK

MNI: US MBA: MARKET COMPOSITE -1.6% SA THRU MAR 15 WK

MNI: EUROZONE JAN CONSTRUCTION OUTPUT +0.5% M/M, +0.8% Y/Y

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

MNI: Growth Drag From Net Zero Carbon Goal Can Be Offset-OECD

MNI BRIEF: Lawmakers Signal Tough Hearing For BOC's Macklem

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Koruna Claws Back Post-CPI Losses

CZK
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EUR/CZK has been gradually unwinding an upswing triggered by the release of below-forecast CPI data and now sits at 25.394, close to neutral levels. The intraday peak reached just after the publication of the CPI report was 25.519, with the rate making a foray above May 11 high of 25.486 in the process. Bears look for a deeper pullback towards Jan 2 high of 24.867. On the flip side, bullish focus falls on Mar 2 high of 25.936.

  • A couple of CNB officials rushed to mitigate the impact of dovish inflation data via their social media channels. Deputy Governor Zamrazilova said that "rates will remain elevated until it's clear that inflation will remain at 2%," while "exchange-rate developments will also play a role." Governor Michl wrote that Board members "will remain hawks" and rates will be lowered cautiously.
  • The Czech Banking Association (CBA) lowered their 2024 GDP growth forecast for Czechia to +1.2% Y/Y from +1.8%, while raising the inflation forecast to +2.7% Y/Y from +2.5%.
  • CZGB curve has bull steepened after the release of benign inflation data, with yields last seen 4.9bp-10.8bp lower. Czech FRAs dropped to fresh cyclical lows, with the market pricing a more aggressive rate-cutting cycle.
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EUR/CZK has been gradually unwinding an upswing triggered by the release of below-forecast CPI data and now sits at 25.394, close to neutral levels. The intraday peak reached just after the publication of the CPI report was 25.519, with the rate making a foray above May 11 high of 25.486 in the process. Bears look for a deeper pullback towards Jan 2 high of 24.867. On the flip side, bullish focus falls on Mar 2 high of 25.936.

  • A couple of CNB officials rushed to mitigate the impact of dovish inflation data via their social media channels. Deputy Governor Zamrazilova said that "rates will remain elevated until it's clear that inflation will remain at 2%," while "exchange-rate developments will also play a role." Governor Michl wrote that Board members "will remain hawks" and rates will be lowered cautiously.
  • The Czech Banking Association (CBA) lowered their 2024 GDP growth forecast for Czechia to +1.2% Y/Y from +1.8%, while raising the inflation forecast to +2.7% Y/Y from +2.5%.
  • CZGB curve has bull steepened after the release of benign inflation data, with yields last seen 4.9bp-10.8bp lower. Czech FRAs dropped to fresh cyclical lows, with the market pricing a more aggressive rate-cutting cycle.