CZECHIA: CNB Debates Financial Stability, Parliament Discusses Bitcoin Scandal
Jun-05 07:21
- The Czech National Bank (CNB) holds a 'major' financial stability meeting today, which will include a discussion of a biannual Financial Stability Report and a decision on a wider range of macroprudential parameters. By contrast, interim meetings held in Q1 and Q3 only involve a decision on setting the countercyclical capital buffer (CCyB) rate. Today's meeting will be followed by a press conference with Bank Board's Jakub Seidler and Financial Stability and Resolution Department Executive Director Libor Holub at 14:30BST/15:30CEST. The minutes of the meeting and a full Financial Stability Report will be published on June 23. A former senior CNB official recently told MNI that the central bank might consider changes to macroprudential settings to slow house price growth, which could open up space for further monetary easing.
- The Chamber of Deputies has just started an extraordinary session to discuss the so-called bitcoin scandal, but outgoing Justice Minister Pavel Blažek is not in attendance. The official will formally vacate his position on Monday, but the opposition is pushing for his immediate removal and for a dismissal of the entire cabinet. Opposition leader Andrej Babiš was the first speaker to take the floor after earlier suggesting that his party could call a no-confidence vote.
- Energy utility ČEZ signed a deal with South Korea's KHNP for the construction of new nuclear reactors at the Dukovany power plant after the Supreme Administrative Court annulled a preliminary injunction that held up the finalisation of the contract.
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GILT TECHS: (M5) Tests Support At The 50-Day EMA
May-06 07:21
- RES 4: 94.75 76.4% of the Dec 3 ‘24 - Jan 13 bear leg (cont)
- RES 3: 94.50 High Apr 7 and key resistance
- RES 2: 94.00 Round number resistance
- RES 1: 92.88/93.93 Intraday high / High May 2
- PRICE: 92.70 @ 08:09 BST May 6
- SUP 1: 92.45 Intraday low
- SUP 2: 91.73/91.43 Low Apr 17 / 15
- SUP 3: 90.47/89.99 Low Apr 11 / 9
- SUP 4: 89.68 Low Jan 15 (cont)
A bull cycle in Gilt futures remains intact and short-term weakness is - for now - considered corrective. Today’s low print has resulted in a test of support at the 50-day EMA, at 92.46. A clear break of this average would signal scope for a deeper retracement and expose 91.73, the Apr 17 low. On the upside, a resumption of gains would open 94.50, the Apr 7 high and a key resistance. Initial firm resistance to monitor is 93.93, the May 2 high.
GILTS: Futures Through Friday's Low & Next Support
May-06 07:19
Gilts lower at the open, extending Friday’s sell off, taking cues from the weakness in global peers over the long weekend.
- The firm prices paid component in the U.S. ISM services survey and a reversal of Monday’s losses in oil are eyed.
- Futures through Friday’s low (92.84) and the 20-day EMA (92.65), basing at 92.45 before rebounding to 94.60.
- Next support of note located at the April 17 low (91.73).
- Yields 1.5-4.5bp higher, curve steeper.
- 10s last ~4.55% after basing at 4.408% last week.
- Curves remain in multi-week ranges. 2s10s ~17bp off cycle highs, last 67.3bp. 5s30s ~14bp off cycle highs, last 133.7bp.
- GBP STIRs roughly in line with pre-gilt open levels covered earlier, showing ~90bp of cuts through year-end, with a 25bp cut fully discounted come the end of this week’s MPC decision.
- We expect a 25bp cut this week, in line with market pricing and all sell-side views we have read.
- We have outlined some potential dovish tweaks to the Bank’s guidance verses in the statement, which could pave the way for consecutive rate cuts over the next 3 meetings.
- Final services PMI data is due today, although that should be much less of a market mover.
MNI: SPAIN APRIL SERVICES PMI 53.4 (FCAST 54.0, MARCH 54.7)
May-06 07:15
- SPAIN APRIL SERVICES PMI 53.4 (FCAST 54.0, MARCH 54.7)
