CZK: Koruna Creeps Higher Despite Industrial PPI Miss
Apr-16 09:05
EUR/CZK has bee under pressure but the 25.0 mark remains some way off, with the pair last dealing -0.047 at 25.038. A dip through that round figure would open up Mar 26 low of 24.845. On the flip side, bulls look for gains towards Apr 7/Jan 17 highs of 25.295/25.317.
- A new opinion poll showed a decline in support for front-runner party ANO, which increases uncertainty around the outcome of the autumn parliamentary election (with all the usual all caveats).
- Factory-gate prices in industry fell by 0.3% Y/Y in March, even as analysts expected them to flatline. Industrial PPI is often seen as a bellwether of price pressures in the economy.
- CZGB yields have faltered across the curve, taking their cue from core markets.
- The PX Index is virtually flat on the day, awaits fresh catalysts.
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MNI: ITALY FEB HICP 0.1% M/M, 1.7% Y/Y
Mar-17 09:03
- MNI: ITALY FEB HICP 0.1% M/M, 1.7% Y/Y
EGBS: Spreads Within 1bp of Friday’s Levels; Ratings Action In Line With Exp
Mar-17 09:02
10-year EGB spreads to Bunds are within 1bp of Friday’s closing levels, with fresh meaningful macro cues lacking this morning and Friday’s ratings action coming in broadly as expected.
- The 10-year OAT/Bund spread is ~0.5bps tighter at 68bps, with the tail risk of a downgrade from Fitch (rating affirmed at AA-; Outlook Negative) averted. Fitch again wrote that France faces “significant fiscal risks due to substantial fiscal deficits and rising government debt levels”, while “political fragmentation complicates France's ability to implement sustainable fiscal consolidation”.
- Over the weekend, PM Bayrou seemingly ruled out a return to a retirement age of 62, drawing criticism from opposition politicians – highlighting existing political risks in France.
- Greece regained investment grade status from Moody’s (upgrade to Baa3; outlook stable). The move was as expected, and the 10-year GGB/Bund spread is ~0.5bps tighter at 79bps. Moody’s wrote that “the public finances have improved more quickly than we had expected” and they “expect Greece to continue to run substantial primary surpluses which will steadily decrease its high debt burden.”
- 10-year PGB spreads are little changed at 49bps, with Fitch affirming Portugal’s rating at A- (Outlook Positive). It’s impossible to know if the recent Government collapse prevented an upgrade, but Fitch did write that “the upcoming election period could affect the implementation of fiscal measures, potentially undermining Portugal's fiscal position”.
STIR: SFRZ5/Z6 Flattener Flow
Mar-17 08:52
An uptick in activity on the SOFR strip seen over the last 30 minutes, driven by a 15K seller of the SFRZ5/Z6 spread at -13.0.
