CZK: Koruna Holds Steady
Sep-17 09:26
EUR/CZK trades flat at 24.319, staying in the vicinity of recent cyclical lows amid the absence of notably domestic headline flow. The technical picture remains unchanged, with bears looking for losses towards Nov 29, 2023 low of 24.203. Initial resistance remains at 24.509, the 50-DMA.
- A Grafton Recruitment survey showed that wages have been growing by an average of 4.25% Y/Y this year, while 'the Czech labour market remains highly competitive' and 'companies continue to struggle to find employees'.
- The Finance Ministry holds an auction for 2035 bonds and 2038 floating-rate bonds.
- CZGB yields are mostly a tad higher; the PX Index is little changed on the day.
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EGBS: Bunds Retrace Half Of Friday’s Selloff But Bearish Threat Still Present
Aug-18 09:26
- Bund futures have retraced around 50% of Friday’s sharp selloff, currently +29 ticks at 129.09. Similar to Friday, there hasn’t been a clear headline trigger for the rally.
- A bearish threat is nonetheless present in Bunds, with resistance not seen till the 20-day EMA at 129.72.
- The German curve has bull flattened, with 5s30s down 1.3bps to 99bps after closing above 100bps for the first time in six years on Friday. Yields are 1-4.5bps lower across the curve.
- The 10-year BTP/Bund spread has tightened almost 2bps back to ~78.5bps, even as European equity futures decline 0.6% and 3m10Y EUR rates vol consolidates Friday’s 2.5bp increase.
- The 10-year IRISH/Bund spread is marginally tighter at 23bps, after Moody’s affirmed Ireland’s sovereign rating at Aa3 on Friday, and retained its Outlook as Positive. The risk was for an Outlook downgrade to Stable.
- The Euro area goods trade surplus was smaller than expected in June at E7.0bln (cons E14.5bln). The seasonally adjusted equivalent meanwhile fell to just E2.8bln vs E15.6bln in May, the lowest monthly surplus since July 2023.
- Focus turns to headline flow stemming from Ukrainian President Zelensky’s meeting at the White House later today.
GERMAN DATA: IFO Economic Experts See Above Target Inflation For 2026
Aug-18 09:23
Economist expectations for inflation in Germany "over the next few years are stable at 2.4 percent for 2025 and 2.3 percent for 2026 and 2028" according to an e-mailed press release with the global IFO Economic Experts Survey.
- This is noticeably above the Bundesbank expectations for these years, which are standing 2.2% for 2025, 1.5% for 2026 and 1.9% for 2027, respectively. IFO could not comment in detail on the discrepancy to us as they just collate the experts' numerical responses.
- Private sector consensus (MNI collation of 7 sellside analysts) for German CPI meanwhile stands at 2.1% for 2025, 1.7% in 2026, and 2.1% in 2027 - so more in line with the Bundesbank's view.
- A total of 1,340 economic experts from 121 countries participated in the IFO survey, which ran from June 17 to July 1 on a global level. For Germany, IFO collated expectations from around 60 economic experts.
SOFR: Fly Activity Picks Up
Aug-18 09:16
Some activity in flies in recent trade:
- SFRZ6/M7/Z7 fly paper paid ~2.7K on -11.5.
- SFRH7/M7/U7 fly 8.5K given at -3.0.
