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Rates Seen Unchanged, But Hawkish Michl Rhetoric Could Follow

CZECHIA
  • The CNB rate decision crosses later today, with the announcement due at 13:30BST/14:30CEST. Press conference/statement (including vote split) follows at 14:45BST/15:45CEST
  • CNB expected unchanged. Previous meeting saw a tight 4-3 vote in favour of steady rates vs. 25bp hike, 50bp was also discussed. Comms shifted in the dovish direction & data have been broadly disinflationary since then, hence the vote split will likely shift.
  • Still, we may hear some hawkish rhetoric from Governor Ales Michl, with the CNB trying to push back against overdone rate-cut bets and support the koruna. The focus will be on the exact vote split (probably 5-2 or 6-1) and language, key uncertainty is over how far the bank will go in wrestling with dovish market bets.
  • Our full Preview found here: https://roar-assets-auto.rbl.ms/files/54212/MNI%20...
  • Cabinet are set to meet later today for their weekly catch-up. Topics cited for discussion include the 2024 budget.

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