CNB: Governor Michl Flags Ongoing Studies On Crypto Investments
Feb-19 09:22
Governor Ales Michl writes in a post on his X handle that "bitcoin (...) is a different story" compared to other crypto assets. In his view, "we central bankers should study it and explore the technology it is built on."
- Michl has recently proposed that the CNB conducts an analysis of potentially investing part (up to 5%) of its international reserves in bitcoin, which was met with mixed reactions of senior economic officials.
- "At the CNB Bank Board meeting on 30 January 2025, I tabled a proposal to analyse the possibility of creating a bitcoin test portfolio" in order to "learn about and try out this highly risky alternative asset."
- "The Bank Board approved a proposal to analyse the options for investing in additional asset classes. Based on the results of the analysis, the Bank Board will then decide how to proceed further."
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EUR: The EUR extends broader high
Jan-20 09:14
- The EUR is seeing broader base buying, testing intraday highs against the CAD, GBP, NOK, JPY, CHF, AUD and the SEK, while the EURUSD still lags somewhat, it is still leading and is up 0.40% on the day.
- After mostly seeing a mixed overnight session for the EUR, it is now in the green versus most G10s.
- EURGBP is testing the immediate resistance right here at 0.8463 High Jan 15, ahead of the next area of interest at 0.8471 61.8% retracement of the Aug 8 - Dec 19 downleg.
EGBS: Spreads Within 0.5bps Of Friday's Levels
Jan-20 09:02
10-year EGB spreads to Bunds are within 0.5bps of Friday’s closing levels, with GGBs modestly outperforming.
- The OAT/Bund spread remains at 78bps, following last week’s general policy address and unsuccessful censure motion against the Bayrou government.
- PM Bayrou’s survival has removed some short-term political uncertainty, allowing a little risk premium to be priced out of OATs (the spread reached a closing high of 84bps last Monday).
- However, medium-term political and fiscal risks remain prevalent in France and the passing of a budget (touted for the end of January) is the next hurdle for Bayrou.
- The BTP/Bund spread is currently 111bps. Last week’s softer-than-expected US CPI drove a pullback in year-end ECB implied rates and a renewed rally in European equities, helping the spread fully unwind its early-January widening.
- A reminder that MNI looks for syndications from Austria, Finland and Spain this week. Books are already open for today’s dual-trance 3/10-year EFSF transaction.
BONDS: Non-committal Trade Thus Far
Jan-20 08:57
Skittish early Monday trade, with EGBs digesting familiar rhetoric from the hawkish wing of the ECB (Schnabel & Holzmann), while looking ahead to Trump’s inauguration.
- German & UK yields within 1bp of Friday’s close across the curve.
- The observance of the MLK holiday in the U.S. means that cash Tsys are closed until Asia hours.
