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Koruna Oscillates Around Neutral Levels, Fiscal Matters Under Scrutiny

CZK

EUR/CZK trades flat at CZK23.685 as participants take stock of the past week, with little of note on the local economic docket today. A slide through May 26 low of CZK23.588 would give bears a green light for targeting May 9 low of CZK23.340. On the flip side, bulls see May 19/Mar 28 highs of CZK23.797/23.820 as their initial target.

  • Finance Minister Zbynek Stanjura may unveil fresh austerity proposals next week after Czechia's fiscal deficit expanded to record highs. The finance chief is yet to consult his ideas with the Cabinet, but some have already voiced reservations about additional savings.
  • CZGBs are softer across the curve, last trading 1.6-5.8bp cheaper across the curve. The PX Index has been underpinned, adding ~1.1% this morning.

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