Koruna Refreshes 15-Year Highs, Then Pulls Back

EUR/CZK trades +0.013 at CZK23.716, remaining near multi-year lows. A recovery above the 50-DMA (CZK24.039) is needed to give bulls some hope for a stronger rebound, while bears look for losses past Aug 1, 2008 low of CZK23.445.

• The pair slipped in reaction to the release of above-forecast January CPI inflation data, albeit the overshoot is unlikely to change the CNB's overall assessment of the economy. We will hear the central bank's take on the latest inflation print at the top of the hour. While the move in EUR/CZK was limited and short-lived, it allowed the pair to refresh 15-year lows as it bottomed out at CZK23.664.
• Elsewhere, the minutes of the CNB's most recent monetary policy meeting showed that the Bank Board does not expect a decline in interest rate at least until Q3. Nuancing the general dovish message of the central bank, the minutes suggested that many members are aware of the risk of a wage-price spiral, while most expect rates to stay higher for longer.
• CZGB yields are elevated across the curve, albeit local-currency bonds outperform Polish and Hungarian peers. The PX index has eased off cycle highs and sits ~0.5% below neutral levels.