Koruna Scores Some Gains, Inflation Eases To Single Digits

EUR/CZK edges lower as we await the CNB's statement on June inflation outturn. The pair last changes hands -0.018 at 23.766 and the next downside target is 23.573, which limited losses on Jun 27. On the flip side, bulls look for gains towards 24.137, the high print of Mar 17.

• Czech inflation eased to single-digit territory, printing at +9.7% Y/Y in June, in line with BBG consensus forecast but below the CNB's projection (+10.1%). The central bank will release its comments on the data at 12:00BST/13:00CEST. Deputy Governor Zamrazilova tweeted that the latest CPI print provides evidence that the current monetary policy settings are restrictive enough.
• Participants added CNB rate-cut wagers after inflation figures crossed the wires. CZGBs advanced across the curve, with 2s lodging most impressive gains. Czech FRAs dropped to new cyclical lows. The moves may have been facilitated by broader downward pressure on rates inspired by recent Fed musings.
• Parliament continues to debate the government's fiscal consolidation package. Coalition representatives will meet this afternoon to smooth out differences which arose during the debate as their conflicting views started to surface. The coalition wants to get the package approved by the end of this week.