CZECHIA: CNB Analysts Warn Against Creeping Inflationary Risk From Gov't Deficit
May-09 07:24
- The Czech National Bank (CNB) published the introductory part of its quarterly Monetary Policy Report, with the full document coming up on May 16. The report features an analysis of 'monetary effects of the general government deficit in the context of rising defence expenditure'. This appendix notes that 'the Czech Republic, along with Slovakia and Germany, has the lowest defence spending in the group of countries for which Russia represents a security threat.' It further suggests that 'the current public finance setup creates a creeping upside risk to inflation' and 'a considerable amount of additional money will thus continue to be created in the economy.'
- Czechia's ex-auto retail sales rose by 3.4% Y/Y in March, marginally undershooting the +3.5% consensus forecast. Sales and repair of motor vehicles rose by 0.5% Y/Y. The CZSO commented that 'retail sale via mail order houses or via Internet and sale of automotive fuel contributed the most to the total growth of retail trade.'
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US TSY FUTURES: TY Blocked
Apr-09 07:24
Latest block trade lodged at 08:01:43/03:01:43 NY:
- TYM5 5K blocked at 110-24, looks like a buyer.
- DV01 ~$324K.
EURIBOR OPTIONS: Call fly buyer
Apr-09 07:23
ERU5 98.25/98.50/98.75c fly, bought for 3.75 in 8k.
EQUITIES: Brief US Futures Spike Serves as Reminder of Risk of Intraday Vol
Apr-09 07:19
- US futures spike higher through the European open, with the e-mini S&P briefly adding 100 points before retracing around half of the rally. The move coincided with the cash equity open in Europe, rather than being triggered by a headline or newsflow - but serve as a further reminder that intraday vol in US assets is likely to persist.
- European markets have gapped lower as they play catch up with the weak close on Wall Street - peripheral market are bearing the brunt, prompting underperformance in Spanish and Italian indices at the open, although most cash markets are off 2% or more.
- The S&P 500 entered bear market territory on both Monday and Tuesday this week, but avoided closing below the mark, which remains at 4915.75, and 36,040 for the Dow Jones.
- China retaliation remains a market focus after the imposition of 104% tariffs on exports headed to the US - but there were few new messages in their comments this morning: China will continue to pursue trade countermeasures, but remain open to talks with the US.
