CZK: Koruna On Back Foot, Focus Turns To CNB
Jun-21 09:18
EUR/CZK consolidates above its 200-DMA, trading above that moving average for a third day in a row. The rate last deals +0.026 at 24.934, with bulls setting their sights on the 100-DMA, which kicks in at 25.093. On the flip side, the focus is on the 50-DMA (24.887) & 200-DMA (24.834), followed by Jun 7 low of 24.537.
- The CNB will announce its monetary policy decision next Thursday (June 27). As things stand, 7 out of 9 analysts surveyed by Bloomberg expect the central bank to slow the pace of monetary easing to 25bp, while the two dissenters expect a steady pace of 50bp.
- CZGB yields are mostly a tad lower, albeit longer-end yields have now ticked slightly higher (15s +0.7bp at typing). The PX Index is marginally weaker, holds yesterday's range.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
GILTS: Bulk Of CPI-Driven Hawkish Move Holds
May-22 09:18
The bulk of the hawkish repricing that came on the firmer-than-expected UK CPI data has held.
- The sticky services components will promote some concern at the BoE, even when any Easter effects are adjusted for.
- Futures recovered from lows of 96.83, operating either side of 97.00 in the time since.
- Note that key support at the May 14 low (97.23) has given way, with any fresh extension lower set to expose the May 3 low (96.43). The latter protects the April 25 low and bear trigger (95.36).
- Gilt yields are 7-12bp higher across the curve, bear flattening. Both 2s10s and 5s30s registered fresh multi-week lows following this morning’s data.
- The data-driven concession ahead of today’s 5-Year auction proved enough to generate solid demand metrics as GBP4.0bn of 4.125% Jul-29 supply was easily digested.
- SONIA futures are 0.25 to 15.0 lower, holding the bulk of the initial CPI-driven move.
- BoE-dated OIS shows 9-15bp firmer across ’24 contracts, with a mere 2bp of easing now priced through next month’s meeting (~11bp was showing late yesterday), 11bp of cuts showing through August (that was close to fully discounting a 25bp cut at yesterday’s close) and ~39bp of easing showing through year end (vs. ~53bp at yesterday’s close)
- Comments from BoE’s Breeden are due later today (13:45 London), although she will appear on a panel focused on macroprudential matters, which will likely limit the scope for broader monetary policy discussions.
| BoE Meeting | SONIA BoE-Dated OIS (%) | Difference Vs. Current Effective SONIA Rate (bp) |
| Jun-24 | 5.180 | -2.0 |
| Aug-24 | 5.089 | -11.1 |
| Sep-24 | 5.010 | -19.0 |
| Nov-24 | 4.899 | -30.1 |
| Dec-24 | 4.812 | -38.8 |
EURIBOR OPTIONS: Put spread buyer
May-22 09:13
ERN4 96.37/96.25ps 1x2, bought for 1 in 3.5k.
EUROZONE ISSUANCE: 3.375% Jun-34 GGB Auction Results
May-22 09:13
| 3.375% Jun-34 GGB* | Previous | |
| ISIN | GR0124040743 | GR0128016731 |
| Amount | E250mln | E200mln |
| Avg yield | 3.51% | 3.61% |
| Bid-to-cover | 3.34x | 3.57x |
| Avg Price | 98.911 | 84.700 |
| Pre-auction mid | 98.759 | 84.183 |
| Previous date | 17-Apr-24 |
