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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
- As inflationary pressures continue to rise in the CEE region (including Turkey), real yields have been plunging to deeper negative territory, therefore leaving the domestic currencies vulnerable.
- CEE FX have been the worst-performing currencies since the start of the year, putting policymakers in a difficult positing as depreciation FX keeps de-anchoring inflation expectations.
- CNB board now pivoting to more dovish stance, a risk for CZK?
Link to full publication:
As inflationary pressures continue to rise in the CEE region (including Turkey), real yields have been plunging to deeper negative territory, therefore leaving the domestic currencies vulnerable.
With an inflation rate above 70%, Turkey remains at the bottom of the ‘League’ with a current 10Y real yield of -53.5%. We saw on Friday morning that the expected inflation for the next 12 months surged to 37.9% in June, which was the highest inflation expectations read since the 49.5% print in 2001. Czech Republic 10Y real yield is also trading at historical lows with the inflation currently standing at 16%.
Source: Bloomberg/MNI
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.
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