Koruna Ticks Higher, CNB Speak In Focus

EUR/CZK trades -0.030 at CZK23.663 as recent buying momentum eases. From a technical perspective, a break above May 19/Mar 28 highs of CZK23.797/23.820 would confirm potential for a firmer recovery, opening up Mar 17 high of CZK24.137. Bears look for a retreat towards May 9 low of CZK23.340 and Apr 14 low of CZK23.207.

• Local headline flow has been dominated by CNB headlines, as Jan Kubicek suggested that the Bank Board could cut interest rates from Q4 or early next year, while Tomas Holub said that discussions on monetary easing could begin at the end of this year, adding that he is against the long-term use of the koruna as a tool of monetary policy,
• Wires reported that Prime Minister Petr Fiala and Finance Minister Zbynek Stanjura will meet with CNB Bank Board members at the central bank headquarters tomorrow. The purpose of the meeting has not been revealed, but it comes as the CNB are assessing the implications of the government's austerity package.
• CZGB curve runs slightly steeper today. The government sold debt for the first time since unveiling its fiscal consolidation plans, offering CZK13bn of bonds maturing in 2028, 2030 and 2034.