CZECHIA: Koruna Ticks Lower As Inflation Stays Within CNB's Tolerance Zone
Jan-13 08:29
- The expected acceleration in Czechia's headline inflation was milder than expected, despite a temporary boost from base effects in certain categories. The rate printed at +3.0% Y/Y, hitting the upper end of the CNB's tolerance band, while both analyst consensus and the central bank projected an increase beyond that threshold to +3.3% Y/Y. Sequentially, prices unexpectedly fell by 0.3% M/M, missing Bloomberg median estimate of +0.1%. The koruna took a hit amid a round of dovish CNB repricing.
- CNB Deputy Governor Eva Zamrazilova will speak at a joint briefing with the CZSO chief at 09:00GMT/10:00CET, commenting on inflation data. Later in the day, CNB staff will release their comments on the latest inflation outturn and a detailed breakdown of the data (including core and monetary policy relevant inflation) at 12:00GMT/13:00CET.
- President Petr Pavel told Czech Radio that he will likely set the date for the next parliamentary election for the second half of September. The poll must be held before October 3-4, while Pavel said that it would be better if the election was not held too close to the summer school holidays ending on August 31.
- Czechia's ex-auto retail sales expanded by 4.3% Y/Y in November, missing the consensus forecast of +4.5%. The previous reading was revised to +5.1% Y/Y from +5.5%.
- Current account balance for December will be published at 09:00GMT/10:00CET.
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MACRO ANALYSIS: MNI US Macro Weekly: Inflation Data Keep Fed Cut On Track
Dec-13 21:13
We have published and e-mailed to subscribers the MNI US Macro Weekly offering succinct MNI analysis across the range of macro developments over the past week. Please find the full report here:
USDCAD TECHS: Fresh Cycle High
Dec-13 21:00
- RES 4: 1.4393 2.0% 10-dma envelope
- RES 3: 1.4327 2.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4296 2.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4246 2.00 proj of the Oct 17 - Nov 1 - 6 price swing
- PRICE: 1.4236 @ 16:38 GMT Dec 13
- SUP 1: 1.4069/3944 20- and 50-day EMA values
- SUP 2: 1.3928 Low Nov 25 and a key support
- SUP 3: 1.3822 Low Nov 6
- SUP 4: 1.3747 Low Oct 17
The trend direction in USDCAD remains up and this week’s gains to a fresh cycle high, reinforces the current bullish theme. The pair has cleared 1.4178, the Nov 26 high, to confirm resumption of the uptrend and maintain the price sequence of higher highs and higher lows. Sights are on 1.4246 next, a Fibonacci projection. Key short-term support has been defined at 1.3928, the Nov 25 low. Initial support to watch lies at 1.4069, the 20-day EMA.
US TSYS: Extending Late Session Lows, Curves Bear Steepen Ahead Next Wed's FOMC
Dec-13 20:40
- Treasuries traded steadily lower throughout Friday's session, initially mirroring weak action in Bunds and Gilts. By the close, the Mar'25 10Y contract slipped to 109-26 (-18) the lowest level since November 22, 10Y yield rising to 4.4046% high (+.0768).
- Initial technical support at 109-22 (76.4% Nov 15 - Dec 6 Upleg) followed by 109-20 (Low Nov 20/21).
- Curves bear steepened: 2s10s +2.272 at 15.568 as short end rates outperformed ahead of next week's FOMC policy announcement where another 25bp rate cut was expected but not certain amid current macro and political uncertainty. That said, the latest unemployment and inflation data have kept the FOMC on track to cut the federal funds rate by 25bp (to 4.25-4.50%) next Wednesday.
- Projected rate cuts into early 2025 look near steady to lower vs. this morning levels (*) as follows: Dec'24 cumulative -24.3bp (-23.7bp), Jan'25 -28.6bp (-29.6bp), Mar'25 -42.2bp (-43.9bp), May'25 -48.4bp (-50.5bp).
- No reaction to this morning's import/export prices, Monday brings flash S&P Global PMIs, Retail Sales, IP & Cap-U on Tuesday.
