Koruna Trades On Back Foot, CNB Minutes Under Scrutiny

EUR/CZK operates +0.013 at 23.740, as participants assess local data and CNB minutes. From a technical standpoint, gains past Mar 17 high of 24.137 are needed to alter the broader picture. Bears look for a sell-off past 23.510 before looking for deeper losses.

• The highlight of this morning in Czechia was the publication of the minutes of last week's CNB monetary policy meeting. The two hawkish policymakers who unsuccessfully sought a 25bp rate hike were Holub and Kubelkova. However, Holub saw this meeting as the last chance raise rates in this inflation episode. The Bank Board reaffirmed its "higher-for-longer" message and appeared wary of cutting rates prematurely.
• Komercni banka assessed that the minutes "confirm the CNB's intention to delay the start of the cycle of interest rate cuts" and shift the risks to their forecast of 75bp worth of cuts this year towards a longer period of stable rates.
• CZGB curve runs steeper as we type, with yields last seen -8.6 to +4.8bp. Czech FRAs adjusted higher after the release of CNB minutes, but then mostly unwound gains. Still, the 6x9 contract remains above neutral levels.
• The final reading of Czechia's Q1 GDP growth was revised marginally lower to -0.5% Y/Y from -0.4%. Quarterly growth estimate was left unchanged at 0.0%.