CZECHIA: CNB Authorises Cautious 25bp Cut In Split Decision
- The Bank Board of Czechia's central bank voted 6-1 to lower the two-week repo rate by 25bp, with the lone dissenter voting for a hold. This brings the policy rate to 3.50%, the upper bound of its estimated neutral range. The decision was supported by an updated macroeconomic forecast and accompanied by hawkish, cautious rhetoric. The statement emphasised that 'monetary policy remains and will remain tight – real rates are distinctly positive both ex post and ex ante' while 'persisting stronger inflation pressures from the domestic economy are limiting room for further rate cuts.' On the other hand, the assessment of risks to the fulfilment of the the inflation target was changed from 'inflationary overall' in March to 'modestly inflationary overall' in the latest statement, as the designation of 'escalating trade wars' was changed from an inflationary risk to a source of uncertainty, with the Board noting that they could cause a short-term rise in prices and/or a long-term economic slowdown.
- The CNB's Spring Forecast (with a cut-off date on April 25) estimated April inflation at +2.0% Y/Y, a tad higher than the +1.8% in the CZSO's preliminary report published a couple of days ago However, the Bank Board's commentary of latest inflation developments was neutral, with members taking note of a below-forecast reading while pointing to an uptick in services price inflation, which was broadly in line with analyst comments.
- The CNB's latest Financial Market Inflation Expectations report showed that inflation expectations of surveyed analysts edged lower across one-year and three-year horizons (by 0.1pp each to +2.2% Y/Y and +2.1% Y/Y respectively) amid a slightly lower economic growth profile. Most correctly predicted yesterday's 25bp rate cut and the average forecast for the two-week repo rate one year from now (i.e. in April 2026) was 3.13%, with a median of 3.00%.
- Czechia observes a public holiday today, which is why the rate decision was announced on a Wednesday.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
WTI TECHS: (K5) Bear Threat Remains Present
- RES 4: $74.66 - High Jan 22
- RES 3: $72.91 - High Feb 11
- RES 2: $68.72/72.28 - 50-day EMA / High Apr 2 and key resistance
- RES 1: $64.85 Low Mar 5 low and a recent breakout level.
- PRICE: $61.34 @ 07:00 BST Apr 8
- SUP 1: $58.95 - Low Apr 7
- SUP 2: $57.79 - 2.236 proj of the Jan 15 - Feb 4 - 11 price swing
- SUP 3: $56.81 - 2.382 proj of the Jan 15 - Feb 4 - 11 price swing
- SUP 4: $55.00 - Round number support
A bearish theme in WTI futures remains intact following the recent impulsive sell-off. The move down has resulted in the breach of a number of important support levels. The break reinforces a bearish threat and, despite being in oversold territory, signals scope for a continuation of the bear leg. Sights are on $57.79 next, a Fibonacci projection. Initial resistance is seen at $64.85, the Mar 5 low and a recent breakout level.
BRENT TECHS: (M5) Trading Closer To Its Recent Lows
- RES 4: $77.75 - High Jan 20
- RES 3: $76.26 - High Feb 20
- RES 2: $72.31/75.47 - 50-day EMA / High Apr 2 and a bull trigger
- RES 1: $67.95 - Low Mar 5 and a recent breakout level
- PRICE: $64.83 @ 06:56 BST Apr 8
- SUP 1: $62.51 - Low Apr 7
- SUP 2: $61.97 - 2.236 proj of the Jan 15 - Feb 4 - 20 price swing
- SUP 3: $60.00 - Psychological round number
- SUP 4: $58.26 - 3.000 proj of the Jan 15 - Feb 4 - 20 price swing
Brent futures continue to trade in a volatile manner and the contract remains closer to its recent lows. The move down cancels a recent bullish theme. Price has traded cleared both the 20- and 50-day EMAs. Furthermore, the contract has breached $67.87, the Oct 10 ‘24 low. This signals scope for a continuation towards $61.97, a Fibonacci projection. On the upside, initial firm resistance is seen at $67.95, the Mar 5 low.
GOLD TECHS: Monitoring Support At The 50-Day EMA
- RES 4: $3223.8 - 3.382 proj of the Nov 14 - Dec 12 - 19 price swing
- RES 3: $3200.00 - Round number resistance
- RES 2: $3196.2 - 3.236 proj of the Nov 14 - Dec 12 - 19 price swing
- RES 1: $3055.6/3167.8 - High Apr 7 / 3 and bull trigger
- PRICE: $3005.0 @ 06:59 BST Apr 8
- SUP 1: $2956.7 - Low Apr 7
- SUP 2: $2945.3 - 50-day EMA
- SUP 3: $2880.3 - Low Mar 10
- SUP 4: $2832.7 - Low Feb 28
The trend condition in Gold remains bullish and the latest pull back appears corrective. Moving average studies are in a bull-mode position highlighting a dominant uptrend and positive market sentiment. Price has traded through the 20-day EMA. The next key support to watch lies at 2945.3, the 50-day EMA. A resumption of gains would refocus attention on $3196.2, a Fibonacci projection. The bull trigger is 3167.8, the Apr 3 high.
