CZECHIA: Finance Ministry Lowers 2025 Growth Outlook
Czech Finance Ministry lowered its 2025 GDP growth forecast to +2.3% Y/Y from +2.5% prior and pointed to downside risks to the updated projections. Inflation is expected to average at +2.3% Y/Y this year.
- "Economic development is burdened by a high degree of risk, particularly in connection with trade and geopolitical tensions. It is difficult to predict whether and to what extent tariffs on goods imported into the United States will be increased or whether further protectionist measures will be taken."
- "Inflationary pressures will continue to be moderated by restrictive monetary policy through interest rates, supported by the expected decline in the dollar oil price and a slight appreciation of the koruna against the euro."
- "Conversely, inflationary factors are represented by continued higher wage growth, the weakening of the koruna against the dollar, as well as increased price dynamics in services, including renewed growth in imputed rent."
- "In aggregate, we consider the risks to the forecast to be skewed to the downside." Among these risks are (1) global supply chain disruptions, (2) geopolitical tensions, (3) tariffs and barriers to foreign trade, (4) structural problems and weak growth of the German economy, (5) the persistence of services price inflation and elevated inflation expectations.
Table 1. Finance Ministry 2025 Macroeconomic Projections
| Indicator | Current Forecast | Previous Forecast |
| GDP | +2.3% Y/Y | +2.5% Y/Y |
| CPI | +2.3% Y/Y | +2.3% Y/Y |
| EUR/CZK | 25.1 | 24.9 |
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COMMODITIES: WTI Futures Holding Higher
WTI futures are trading higher today as the contract extends recent gains. A stronger reversal to the upside would refocus attention on key short-term resistance at $76.41, the Oct 8 high. Initial firm resistance is unchanged at $71.97. A bear threat in Gold remains present. The yellow metal traded sharply lower on Dec 18 and the move undermines a recent bull theme. A resumption of weakness would open key support at $2536.9, the Nov 14 low.
- WTI Crude up $0.4 or +0.56% at $71.41
- Natural Gas down $0.14 or -3.51% at $3.799
- Gold spot up $8.09 or +0.31% at $2614.49
- Copper down $3.3 or -0.81% at $405.95
- Silver up $0.01 or +0.05% at $28.961
- Platinum up $8.16 or +0.9% at $912.55
EQUITIES: Bear Threat in E-mini S&P Remains Present
A bear threat in the S&P E-Minis contract remains present and the latest move down highlights the end of the recent Dec 20 - 26 corrective bounce. An extension lower would expose 5866.00, the Dec 20 low and a key short-term support. A bull cycle in the Eurostoxx 50 futures contract remains intact, however, the recent move down highlights a corrective phase. Despite the latest bounce, a short-term bear threat remains present - for now.
- In China the SHANGHAI closed lower by 55.563 pts or -1.63% at 3351.763 and the HANG SENG ended 18.53 pts higher or +0.09% at 20059.95.
- Dow Jones mini up 56 pts or +0.13% at 42977, S&P 500 mini up 17.75 pts or +0.3% at 5976.25, NASDAQ mini up 87.75 pts or +0.41% at 21503.25.
CHINA: CFETS RMB Basket Tweak Drops USD, EUR, JPY Weighting, Adds MOP
China adjust the currency weightings as part of the CFETS RMB Index: Full basket of currencies now composed of 25 currencies, having included the Macau Pataca (MOP) for 2025:
- USD weighting dropped to 18.903% from 19.460%
- EUR weighting dropped to 17.902% from 18.080%
- JPY weighting dropped to 8.584% from 8.963%
Full list found here: https://iftp.chinamoney.com.cn/chinese/zxpl/20241231/3028340.html
