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CZK: Koruna Erases Initial Losses, Industrial PPI Tops Forecasts

CZK
EM BulletCzech RepublicBulletEmerging Market NewsCentral and Eastern EuropeCzechia

EUR/CZK deals -0.005 at 25.278 after briefly showing at new YtD highs. Bears look for a deeper pulback past the 100-DMA (25.204) and 50-DMA (25.192) towards the 25.0 area. Bulls keep an eye on Nov 6 high of 25.449.

  • Expectation-beating industrial PPI data failed to catalyse any significant koruna moves after headline CPI provided a dovish surprise last week, while Deputy Governor Zamrazilova signalled readiness to consider resuming rate cuts early this year.
    • Worth noting that Zamrazilova also said last week that EUR/CZK should stay around 25.0 in the absence of geopolitical risks, while also describing it as the most difficult variable to forecast.
    • The CNB's Autumn forecast suggested that EUR/CZK should average at 25.37 in 1Q25, climbing to 25.43 in 2Q25.
  • Komercni banka commented that the upside surprise in industrial PPI was chiefly due to the energy component, which was boosted by a significant but short-lived spike in spot wholesale electricity prices in December.
  • CZGB yields have faltered across the curve and remain below neutral levels. The PX Index has rallied by 1.2% today, refreshing cyclical highs (i.e. best levels since 1H2008).
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EUR/CZK deals -0.005 at 25.278 after briefly showing at new YtD highs. Bears look for a deeper pulback past the 100-DMA (25.204) and 50-DMA (25.192) towards the 25.0 area. Bulls keep an eye on Nov 6 high of 25.449.

  • Expectation-beating industrial PPI data failed to catalyse any significant koruna moves after headline CPI provided a dovish surprise last week, while Deputy Governor Zamrazilova signalled readiness to consider resuming rate cuts early this year.
    • Worth noting that Zamrazilova also said last week that EUR/CZK should stay around 25.0 in the absence of geopolitical risks, while also describing it as the most difficult variable to forecast.
    • The CNB's Autumn forecast suggested that EUR/CZK should average at 25.37 in 1Q25, climbing to 25.43 in 2Q25.
  • Komercni banka commented that the upside surprise in industrial PPI was chiefly due to the energy component, which was boosted by a significant but short-lived spike in spot wholesale electricity prices in December.
  • CZGB yields have faltered across the curve and remain below neutral levels. The PX Index has rallied by 1.2% today, refreshing cyclical highs (i.e. best levels since 1H2008).