Koruna Gains Thanks To Broader Sentiment, Countdown To Next Week's CNB Decision Begins

EUR/CZK has faltered on the back of wider market sentiment, which sees the greenback struggle as EM FX trade on a firmer footing. The pair deals -0.046 at 25.209 and bears look for clean breach of Mar 18 low of 25.087, which would open up the round figure of 25.000. On the topside, a clearance of the 50-DMA (25.310) would expose Feb 15 high of 25.519.

• In the final hours before the CNB's media blackout, Deputy Governor Zamrazilova said that for her next week's rate decision will be between a 25bp and a 50bp cut. This comes after March's dovish dissenter Holub said that he would likely moderate his rate-cut call to 50bp next week. Alongside the rate decision, the CNB will publish a new macroeconomic forecast, which will cast some light on its current assessment of the economy, as well as the ongoing discussions on possible adjustments to r*.
• In their latest macroeconomic forecast, Komercni banka said that the CNB will keep cutting rates and may end the year with a policy rate of 3.50%.
• CZGBs lag regional peers as the 5-15-year segment comes under some pressure. The PX Index is little changed on the day.