Koruna Inches Higher, Parliament Debates No-Confidence Motion

EUR/CZK holds yesterday's range so far, last dealing -0.018 at 24.643. The rate continues to tick away from its recent cyclical highs, but this pullback can be considered corrective for now. A breach of Sep 29 low of 24.306 and the nearby 24.3 area would signal potential for a deeper sell-off. On the flip side, bulls look for a clearance of Oct 12 high of 24.727.

• The no-confidence motion tabled by ANO against Prime Minister Fiala's government is expected to fail. Later in the day, President Pavel will present his controversial candidate for a constitutional judge to the Senate.
• Speaking at the CNB Discussion Forum yesterday, officials failed to specify the likely timing for the inauguration of the rate-cutting cycle. However, Governor Ales Michl left all options on the table for the coming meetings.
• Komercni banka write this morning that although "markets are pricing in a drop in the repo rate of roughly 70bp by the end of this year," they "are still inclined to believe that the majority of the Bank Board will choose a more cautious approach". They believe that the Board "will not yet reach for a rate cut in the environment of a temporary increase in year-on-year inflation in the final quarter of this year".