CZK: Koruna Holds Narrow Range, Election Matters Remain In Focus

EUR/CZK changes hands +0.006 at 24.544, holds a familiar range. A dip through Aug 11 low of 24.389 would turn the focus to the downside again, while bulls look for a move through the nearby 50-DMA, which kicks in at 24.601.

• Finance Minister Zbyněk Stanjura unveiled a draft 2026 state budget at yesterday's Cabinet meeting. The plan envisages a CZK280bn deficit, which is almost CZK40bn higher than the target for this year. This kicks off a period of political negotiations within the Cabinet and the final version must be submitted to the Chamber of Deputies by the end of September. The draft budget should be published this Sunday but its further fate may be complicated by the imminent parliamentary elections, as the fiscal plan will be voted on by new parliament.
• Pre-election machinations continue to draw attention. Seznam Zprávy reported that ANO softened the demand on its Brno division to sever ties with ODS at the municipal level and extended the deadline until after the parliamentary elections. Separately, STAN leader Vít Rakušan tried to position his party as a moderate force between the ODS and Pirates after himself and Prime Minister Fiala (ODS) ruled out cooperation with ANO.
• Agriculture Minister Marek Výborný (KDU-ČSL) denied dragging his feet on recovering billions in subsidies for opposition leader Andrej Babiš's Agrofert. Seznam Zprávy had earlier reported that the government had relevant analyses already in 2022 but has only taken action in the lead-up to this autumn's parliamentary elections.
• CZGs have picked up a bid, yields have headed lower across the curve. The PX Index has edged lower.