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Koruna Extends Losses Amid Light Domestic News Flow

CZK

EUR/CZK continues to trade with bullish bias, last sitting +0.058 at 23.886. The rate remains trapped in a bull channel with a ceiling intersecting at 24.064. A break here would expose 24.137, which capped gains on Mar 17. On the flip side, a slide through channel floor at 23.643 would open up Jun 27 low of 23.573.

  • Komercni Banka wrote in a research note today that while the Finance Ministry plans to issue CZK150-250bn of CZGBs in 2H2023, down from CZK280bn in 1H23, they believe that the actual issuance in the second half of the year will be around CZK200bn. The first auction of 2H2023 will be held tomorrow, with CZK6bn of 2031 bonds and CZK8bn of 2034 bonds on offer. The government is trying to cut spending as record-breaking budget deficits are seen fanning inflation in Czechia.
  • Czech FRAs have eased across the curve today. CZGB yields remain at depressed levels following initial downswings.

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