Koruna Edges Lower, March Econ Activity Data Disappoint

EUR/CZK changes hands +0.019 at 25.024 as it keeps flirting with the 25.0 figure. A break above the 50-DMA (25.255) is needed to bring Feb 15 high of 25.519 into play. Meanwhile, a sustained move through 25.0 would allow bears to take aim at Jan 2 high of 24.867.

• Czech data from the real economy were rather downbeat. Industrial production shrank more than forecast in March (by 11.1% Y/Y vs. -8.4% expected and +1.5% in February), while construction output contracted by 8.3% Y/Y (versus +3.6% in February). On the other hand, trade surplus widened to CZK39.3bn in April from CZK36.5bn prior, despite expectations of a decline to CZK17.0bn.
• Data from the CNB showed that the central bank sold an equivalent of EUR300mn of returns on its FX reserves in March, the same amount as in the previous month. The CNB had earlier said that the operations should not materially affect the exchange rate of the koruna.
• CZGB yields have slipped across the curve, in line with the moves seen across the wider FI space. The PX Index has added 0.6% thus far.