CZK: Koruna Advances With Market Eyeing CNB Rate Decision Next Week
EUR/CZK refreshed cyclical lows and last deals -0.009 at 25.053, narrowing in on the psychologically important 25.0 area. The RSI is touching the 30 threshold of oversold territory but has not yet moved beyond there, even as the pair operates below its 50-, 100- and 200-DMAs. On the topside, a rebound above the 200-DMA at 25.142 would give bulls some incremental reprieve.
- October saw Czechia's current account balance flip into a surplus of CZK12.99bn, which exceeded the consensus forecast of CZK5.15bn.
- The minutes from the CNB's most recent financial stability meeting revealed that the decisions to keep key macroprudential settings unchanged were unanimous.
- All nine entries in the Bloomberg survey indicate calls for a pause at the CNB's monetary policy meeting next week. Czechia's 1x4 FRAs trade at a negligible spread with 3-month PRIBOR.
- The central bank is in its media blackout period and the domestic data calendar does not include any further significant releases ahead of next week's rate decision.
- CZGB yields have edged higher across the curve. The PX Index has added 0.4%, hitting new cycle highs just shy of 1,750.
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GILT AUCTION RESULTS: New 4.375% Mar-28 Gilt
| 4.375% Mar-28 Gilt* | Previous | |
| Amount | GBP4.00bln | GBP4.00bln |
| Avg yield | 4.499% | 4.082% |
| Bid-to-cover | 3.12x | 3.29x |
| Tail | 1.0bp | 0.6bp |
| Avg price | 99.629 | 99.253 |
| Low price | 99.600 | 99.240 |
| Pre-auction mid | 99.240 | |
| Previous date | 23-Oct-24 | |
| Previous issue | 3.75% Mar-27 Gilt |
EURIBOR: EURIBOR FIX - 13/11/24
EURIBOR FIX - EMMI/Bloomberg.
- EUR001W 3.1470 0.0020
- EUR001M 3.0990 0.0110
- EUR003M 3.0230 -0.0110
- EUR006M 2.7790 -0.0180
- EUR012M 2.4950 -0.0070
SECURITY: Blinken Looks To Assure NATO, Ukraine, Europe As Trump Picks Def Sec
US Secretary of State Antony Blinken is in Brussels for talks with NATO Secretary General Mark Rutte, the outgoing and incoming EU High Reps. for Foreign Affairs and Security Policy Josep Borrell and Kaja Kallas, UK Foreign Secretary David Lammy, and Ukrainian Foreign Minister Andriy Sybiga in an effort to assure these organisations and countries of the US' continued commitment to its prominent role in European defence. Blinken says that the US is 'on track to push every dollar available to Ukraine', and that they 'will continue to adapt and just to ensure Ukraine is in the strongest position'.
- Blinken's visit has gained increased attention following US President-Elect Donald Trump's picks for key positions within the foreign policy sphere. Overnight, the Trump transition team confirmed that Fox and Friends host, author, and former soldier Pete Hegseth has been tapped as Secretary of Defence. The appointment garnered notable surprise given Hegseth's lack of experience within gov't or the Pentagon. In a podcast published last week Hegseth appeared to speak positively on the prospect of firing Chairman of the Joint Chiefs Gen. Charles Q. Brown Jr.
- The naming of Sen. Marco Rubio (R-FL) as Secretary of State and Rep. Mike Waltz (R-FL) as National Security Adviser could also cause jitters in Europe. While both are seen as well-versed in foreign policy issues, both are primarily China hawks who have advocated a shift in focus away from Europe and towards the Indo-Pacific.
