Koruna Extends Gains, PX Rises On CEZ Relief

EUR/CZK continues to move away from two-month highs printed last Friday at CZK23.797 and last trades -0.057 at CZK23.621. Bears look for a further decline towards May 9 low of CZK23.340. Bulls see May 19/Mar 28 highs of CZK23.797/23.820 as their initial target.

• The government and central bank sought to present a united front in their fight against inflation as Prime Minister Fiala and Finance Minister Stanjura visited CNB headquarters to meet with the Bank Board. Fiala used the opportunity to present his fiscal consolidation plan to members of the rate-setting panel and commented that monetary and fiscal authorities share a goal of curbing inflation.
• Czech stocks have turned bid, with the PX index up 1.2% on the back of strong gains for majority-state-owned energy utility CEZ (+5.8%). Seznam Zpravy attribute the rally to the fact that company's planned restructuring is not included in the agenda of the general meeting slated for June 26. This has seemingly provided some relief to investors after the Cabinet recently approved draft legislation lowering the quorum for asset splits.