Koruna Extends Losses, Local Calendar Remains Light

EUR/CZK continues to creep higher and last deals +0.067 at CZK23.761, printing its best levels since Mar 28. Should bulls manage to force their way through Mar 28 high of CZK23.820, they could take aim at Mar 17 high of CZK24.137. Conversely, bears look for losses towards May 9 low of CZK23.340.

• In the absence of major domestic risk events, the koruna remains exposed to the influence of external environment. That being said, some of its recent losses over the past few days have been attributed to the government's plans to reduce budget deficits, which would reduce pressure on the CNB to keep monetary settings tight (albeit there are question marks surrounding the structure and implementation of austerity measures).
• CZGB curve has twist steepened at the margin, with yields sitting -3.6bp to +2.0bp. The PX Index has added ~0.3%, catching a breather after its recent decline, which yesterday was facilitated by losses for the majority-state-owned CEZ as the government sought to remove a key legal hurdle to its planned restructuring.