Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Executive Summary:
- The CNB is widely expected to stand pat on rates.
- Governor Ales Michl ruled out rate cuts "any time soon".
- However, the Bank Board will likely discuss strategy for future easing.
Full preview including summary of sell-side views here:
MNI CNB Preview - September 2023.pdf
The Czech National Bank is universally expected to keep the two-week repo rate unchanged at 7.00%, sticking with its cautious stance even as latest local data outturns have remained slightly dovish on balance. However, policymakers have indicated that they might discuss the strategy for future monetary easing as soon as this week. Any fresh comments shedding light on the trajectory of the upcoming rate-cut cycle will be closely watched, in the absence of fresh macroeconomic forecasts.
Fig. 1: Czechia CPI vs. Bloomberg & CNB Forecasts
Source: MNI - Market News/Bloomberg/CNB
Aligning with virtually unanimous consensus, we expect the CNB to stand pat on rates this week, in line with its own guidance. There will be no fresh macroeconomic forecast this time around – the next one will be published alongside the November rate decision. Against this backdrop, the central bank’s rhetoric on the upcoming rate-cut cycle will provide the main point of note. We think that Governor Michl will likely reaffirm the CNB’s cautious approach to loosening monetary settings amid concerns over elevated core inflation and the intention to make sure that inflation is on track to become sustainably anchored around the +2% Y/Y target.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.