Koruna On Back Foot, CNB Expects Rapid Disinflation This Year

EUR/CZK has printed fresh intraday highs amid an upleg in EUR crosses, with below-forecast Czech inflation data sapping strength from the Koruna. The rate last sits +0.060 at CZK24.035, familiar technical picture remains in play.

• USD/CZK is little changed at CZK22.339, after touching cyclical lows earlier in the session. The next bearish target is provided by Mar 31 low of CZK21.840, with DMA studies still in a bearish setting.
• The PX index sits marginally higher after snapping its dynamic six-day rally yesterday. Meanwhile, CZGB yield curve has bull flattened today.
• The CNB reaffirmed its view on inflation outlook, noting that price growth will likely peak early this year and then ease off sharply, reaching single-digit levels in 2H2023 and approaching the +2% Y/Y target next year. Price growth unexpectedly slowed in December, owing to the government's energy price regulations.