Koruna Little Changed Amid CNB Musings

EUR/CZK stabilises after a corrective pullback from Jul 24 cycle high of 24.187, which allowed the pair to unwind overbought technical conditions. The rate trades flat at 24.030 and bears look for further losses towards the 23.745 support area. Conversely, a jump above 24.187 would allow bulls to take aim at Dec 30, 2022 high/23.6% retracement of the 2020 - 2023 sell-off at 24.336/24.341.

• Domestically, comments from several CNB members drew most attention this week. Eva Zamrazilova, Jan Frait and Jan Prochazka pushed back against overdone rate-cut bets, although Frait admitted that the discussion on easing policy may start this autumn. Earlier this week, Komercni banka said that they expect the CNB to cut rates only in 2024. Moneta Money Bank CEO spoke in a similar vein, noting that "there is no need to lower the rates in the next six months." By contrast, Ceska sporitelna wrote this morning that they have pencilled in two 25bp cuts for November and December this year.
• The Czech economic docket is virtually empty until the release of advance Q2 GDP on Monday. The CNB will announce its monetary policy decision next Thursday, which means that the Bank Board's "media quarantine" begins this afternoon.