Koruna Weakens Alongside Regional Peers, CNB's Kubicek Speaks Before Blackout Period

EUR/CZK has advanced and last deals +0.082 at 24.685, with CZGB yields trading slightly lower. Familiar technical contours remain in play, as bulls set their sights on Oct 19 high of 24.737. On the downside, the 24.3 area provides a firm layer of support.

• CNB's Jan Kubicek indicated that for him next week's rate decision will be a close call between a cut and a pause. "Conflicting risks" make the decision difficult, with the Bank Board willing to deliver "continuous, gradual easing" once the rate-cut cycle starts. According to the official, delaying the first cut until December "wouldn't be a serious mistake" while waiting until 2024 might necessitate bigger cuts later on, which Kubicek would be less comfortable with. The CNB will announce its next rate decision on November 2, with the "media quarantine" period starting tomorrow.
• Parliament starts debating the 2024 budget draft, which includes a CZK43bn lower deficit target than this year's spending plan. The budget is expected to be approved, given the government's control of both houses of parliament.