CZECHIA: ANO Threatens Confidence Vote Over Justice Min Removal
The main opposition right-wing populist ANO has said that it is set to call a no-confidence vote in the coalition gov't of PM Petr Fiala. ANO deputy leader Karel Havlicek said in a TV interview that "Unless something absolutely exceptional happens, we will trigger a no-confidence vote, there is no other option." This follows the resignation of Justice Minister Pavel Blazek, who was forced from office amid the acceptance of a USD45mln bitcoin donation to the ministry from Tomas Jirikovsky, who was previously convicted of running an online marketplace for illegal drugs and weapons.
- Should a confidence vote take place, and all members vote along party lines, the gov't should be able to survive. Fiala's conservative Civic Democratic Party (ODS), the localist Mayors and Independents (STAN), the centrist Christian and Democratic Union – Czechoslovak People's Party (KDU-CSL) and the liberal Tradition Responsibility Prosperity (TOP 09) hold a combined majority of 104 seats in the 200-member chamber.
- Deputy speaker of the Chamber of Deputies, Eva Decroix, has been nominated by Fiala to replace Blazek. She hails from Fiala's ODS, as did Blazek. While STAN has voiced its support for Decroix as a replacement for Blazek, Denik reports that the group remains uneasy with regards to the bitcoin situation, fearing more scandal to come out of the woodwork. This could see the group pull the plug on the gov't, even if an ANO confidence vote fails.
- The next legislative elections are scheduled for 3-4 October. The Fiala gov't is widely expected to lose its majority, with ANO, led by former PM and Agrofert's billionaire founder Andrej Babis, is on course to remain as the largest party in parliament. However, Czechia's policy direction will come down to the eventual coalition composition.
Chart 1. Czech Camber of Deputies
Source: Chamber of Deputies, MNI
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USDCAD TECHS: Hits Bear Trigger, New Cycle Low
- RES 4: 1.4415 High Apr 1
- RES 3: 1.4296 High Apr 7
- RES 2: 1.4087 50-day EMA
- RES 1: 1.3906/3935 High Apr 17 / 20-day EMA
- PRICE: 1.3793 @ 17:00 BST May 2
- SUP 1: 1.3760 Low Apr 21 and the bear trigger
- SUP 2: 1.3744 76.4% retracement of Sep 25 ‘24 - Feb 3 bull run
- SUP 3: 1.3696 Low Oct 10 2024
- SUP 4: 1.3643 Low Oct 9 ‘24
The trend set-up in USDCAD deteriorated further Friday, with prices slipping through the bear trigger to narrow the gap with next support. The fresh cycle low reinforces the bear cycle and signals scope for a continuation near-term. Potential is seen for a move towards 1.3744, a Fibonacci retracement. Moving average studies are in a bear mode position, highlighting a dominant downtrend. First resistance to watch is 1.3943, the 20-day EMA.
AUDUSD TECHS: Consolidation Phase
- RES 4: 0.6550 61.8% retracement of the Sep 30 ‘24 - Apr 9 bear leg
- RES 3: 0.6528 High Nov 29 ‘24
- RES 2: 0.6471 High Dec 9 ‘24
- RES 1: 0.6470 High May 2
- PRICE: 0.6445 @ 16:59 BST May 2
- SUP 1: 0.6344/6316 Low Apr 24 / 50-day EMA
- SUP 2: 0.6181 Low Apr 11
- SUP 3: 0.6116 Low Apr 10
- SUP 4: 0.5915 Low Apr 9 and key support
AUDUSD remains inside a consolidation phase, having traded either side of the 0.6400 level for 10 consecutive sessions. The underlying trend remains bullish and the pair is trading close to recent highs. Price has recently breached a key resistance at 0.6409, the Dec 9 ‘24 high. This breach reinforces bullish conditions and signals scope for a continuation higher near-term. Sights are on 0.6471 next, the Dec 9 2024 high. Initial key support to monitor is 0.6316, the 50-day EMA. A clear break of this EMA would be a concern for bulls.
US TSYS: Rates Retreat, Sentiment Improved Though Trade Risk Remains
- Treasuries look to finish near late Friday session lows after trading firmer on the open, higher than expected Nonfarm payrolls at 177k (sa, cons 138k) of which private contributed 167k (sa, cons 125k) triggered the early reversal.
- However, two-month revisions of -58k offset the 39k beat for nonfarm payrolls, with a similar story for private (a 42k surprise vs -48k two-month revision).
- Stocks are back near four week highs - pre-"Liberation Day" levels as hopes of some trade deal being made improved sentiment.
- The Wall Street Journal reports that "Beijing is considering ways to address the Trump administration’s gripes over China’s role in the fentanyl trade... potentially offering an off-ramp from hostilities to allow for trade talks to start." The Journal notes that "discussions remain fluid" and China "would like to see some softening of stance from President Trump".
- Currently, the Jun'25 10Y contract trades -20 at 111-07.5 vs 111-02 low -- initial technical support (50-dma) followed by 110-16.5/109-08 (Low Apr 22 / 11 and the bear trigger). Curves bear flattened, 2s10s -3.480 at 48.002, 5s30s -4.911 at 86.807.
