Koruna Softens With CNB Speak Under Scrutiny

EUR/CZK has now moved away from new cyclical lows printed earlier at CZK23.926. The rate turned bid as participants digested a round of comments from CNB officials but it has now eased off highs. The pair last changes hands +0.022 at CZK23.965, with bears looking for a resumption of losses towards new multi-year lows. Bulls look for a rebound towards the 50-DMA, which kicks in at CZK24.223.

• Czech central bankers said price growth could temporarily accelerate this month before disinflation takes hold. Deputy Governor Zamrazilova told E15 that core inflation should slow to single digits in 2H2023. Hawkish dissenters Marek Mora and Tomas Holub agreed on the general outlook for inflation but reiterated their call for higher interest rates. Outgoing Deputy Governor Mora pointed to the need to cool the surprisingly resilient labour market, while Holub said interest rates should be "slightly," albeit not "dramatically," increased.
• CZGB yield curve has flattened today, with the short-end leading declines. The PX index has added 0.7% so far.