Koruna Takes Hit From Pre-CNB Release Of Weak GDP Data

The release of downbeat Czech GDP figures pushed EUR/CZK higher but the pair is now pulling back from its reaction highs printed just above the 24.6 figure. It last trades +0.033 at 24.583, with the koruna still sitting close to the bottom of the EMEA pile, lagging both its CE3 peers. Today's upswing has allowed EUR/CZK to move away from its worst levels in almost three weeks.

• Czechia's Q3 GDP printed at -0.6% Y/Y, undershooting consensus (-0.3%) and the CNB's projection (-0.25%), according to advance data released this morning. The report came out at a sensitive time, with market participants awaiting this Thursday's CNB rate decision, which is seen as a close call between a 25bp cut and a hold.
• CZGB yields are broadly lower, with curve flattening at the margin. The PX Index has only just recouped its opening loss to last changes hands at virtually unchanged levels.
• Technically, a dip through the 50-EMA (24.438) would allow bears to set their sights on the significant 24.3 support area. Bulls see Jul 7, 2022 high of 24.797 as their initial target.