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Market Prepares For Czech General Elections

CZECHIA
  • The Czech Republic enters the last week of campaign before Oct. 8-9 general elections, with leaders of political parties scheduled to meet in a series of debates (BBG).
  • We recently saw that Czech Prime Minister Andrej Babis's ANO party looked the favorite to garner the most votes in this week's elections.
  • Last week, the CNB surprised the market with an aggressive 75bps hike (vs. 50bps consensus), clearly indicating that the CNB board is very sensitive to rising inflationary pressures.
  • The Central bank is expected to continue its tightening cycle in the near term, with the debate now only focusing on the size and the frequency of future hikes.

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