CZK: Koruna Advances To Fresh One-Year High Despite Political Turmoil

EUR/CZK changes hands -0.037 at 24.788, printing its worst levels in a year. A move through trendline support drawn off Dec 16 (24.782) would turn the focus to to 24.537, the low print of Jun 7. Bulls look for a rebound towards the 25.0 mark. The CNB's latest forecast assumed that the exchange rate would average at 25.1 through 1H25 before rising to 25.2 and 25.3 in the final two quarters of the year.

• Opposition leader Andrej Babiš threatened to table a no-confidence motion if the government refuses to step down, while SPD and the Pirate Party both suggested they would support it. Together they have 95 votes in the Chamber of Deputies but would need 101 to bring the government down. Parliament is currently holding an extraordinary session to discuss the so-called bitcoin scandal, but the main culprit (outgoing Justice Minister Blažek) and key cabinet members (PM Fiala, Finance Minister Stanjura) are not in the room.
• The CNB holds a 'major' financial stability meeting today, i.e. one at which it debates the Financial Stability Report and decides on a wider range of macroprudential settings rather than just the countercyclical capital buffer (CCyB) rate. Any decisions will be announced during a press conference at 14:30BST/15:30CEST. A former CNB official told MNI recently that the Bank Board could consider adjusting macroprudential settings to curb house price growth and open up some room for further monetary easing.
• CZGB yields are generally a tad lower across the curve. The PX Index is little changed on the session.