Koruna Slips Despite Continued Bullish Run In Czech Equities

EUR/CZK trades +0.056 at CZK23.827 as a busy Czech data week gets underway. Bulls continue to eye the descending 50-DMA (CZK24.087) for initial resistance, while bears look for a resumption of losses past Jan 30, 2023/Oct 30, 2008 lows of CZK23.716/23.700.

• CZGBs are broadly weaker, with global interest rates adjusting higher amid the reassessment of the central bank pivot narrative.
• The PX index has edged higher, beating its CE3 rivals WIG20 & BUX. It tested cycle highs printed last Friday but is yet to stage a convincing break. Moving-average studies provided a strong bullish signal as the 50-DMA crossed above the 200-DMA, completing a "golden cross" formation.
• Czechia's trade deficit narrowed more than forecast in December, to CZK1.2bn from CZK24.5bn prior versus CZK19.0bn expected. Meanwhile, industrial output rose 1.3% Y/Y in December, missing the +3.3% median estimate, providing evidence of cooling economic activity in Czechia.
• Czechia's economic docket is heavy with data this week, with retail sales due tomorrow and unemployment coming up Wednesday. Looking further afield, January CPI readings provide the focal point this week. Inflation is expected to have accelerated at the start to the year, albeit the dominant view is that the spike will be temporary.