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USDCAD TECHS

Needle Still Points South

US TSYS

Yields Bounce as Equities Make New Monthly Highs

AUDUSD TECHS

Heading North

EURJPY TECHS

Bull Rally Accelerates

COLOMBIA

Economists Survey Raises 2021 CPI Forecast To 4.9%

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  • In the past 18 months, we have seen that Czech financials stocks have been significantly more sensitive to ST bond yields than the traditional 'yield curve' .
  • While the rising uncertainty over a range of risk factors (Delta variant, falling Chinese liquidity…) has been pushing the 2Y10Y yield curve lower, the recent 'hawkish' policymakers' tone keep sending Czech short term bond yields higher.
  • A 50bps hike at the September 30 meeting seems very likely following the positive surprise in inflation.
  • Czech CPI inflation came in higher than expected in August and rose to 4.1% YoY (vs. 3.6% exp.), up from 3.4% from the previous month.
  • MSCI Czech financials index broke its 1,171 resistance this week to trade at a its highest level since April 2019. Next level to watch on the topside stands at 1,200.

Source: Bloomberg/MNI