CZK: Koruna Cuts Weekly Loss, Coalition Talks Hit Snags

The koruna paces gains in the EMEA FX space, with EUR/CZK taking a sharp downturn roughly since local markets re-opened. The pair last deals -0.077 at 24.298 after unsuccessfully testing resistance from the 50-DMA (24.404) in recent days and is now heading towards support near the 24.2 mark.

• Presumptive PM candidate Andrej Babiš played down expectations that he could announce an agreement with the SPD and Motorists on the composition of his future cabinet as soon as today. Negotiations appeared to be dragging on, partly because of President Petr Pavel's reservations about some potential ministerial nominees and his declaration that he would not appoint a new Prime Minister before the newly elected Chamber of Deputies convenes on November 3.
• Czechia's September CPI inflation was confirmed at +2.3% Y/Y in final reading. Market reaction was limited but it came on the back of a below-forecast flash reading, which had affected the pricing of future monetary policy action. From the central bank's perspective, the structure of the data remains worrying, as much of the downside surprise resulted from more benign food prices, which are notoriously volatile. The CNB will comment on the latest inflation print at 12:00BST/13:00CEST.
• CZGB curve runs marginally steeper at typing. The PX Index has added 0.6%.