CZK: Koruna Steady, Familiar Themes In Play
Nov-20 10:35
EUR/CZK trades flat at 24.174. Bulls continue to keep an eye on the 50-DMA, which intersects at 24.296, while bears look for a sell-off towards the 24.0 figure.
- CNB's Karina Kubelkova said that the current monetary policy settings are slightly restrictive and appropriate to leave room for flexible reaction to materialising risks, which at the moment remain broadly balanced.
- Motorists' leader Petr Macinka arrived at the Castle for his meeting with President Petr Pavel, who refuses to appoint the party's honorary chairman Filip Turek to the position of Foreign Minister.
- CZGBs are slightly softer across the curve. The PX Index stays close to neutral levels.
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EQUITY OPTIONS: EU Bank Call Spread, Spread
Oct-21 10:33
SX7E (19th Dec) 260/265cs 1x2 vs (20th Mar) 255/275cs 1x2, bought the March for 1.2 in 3k.
ESM ISSUANCE: 6-Month ESM-Bill Auction Results
Oct-21 10:32
| Type | 6-month bills |
| Maturity | Apr 23, 2026 |
| Amount | E1.095bln |
| Target | E1.1bln |
| Previous | E1.084bln |
| Avg yield | 1.979% |
| Previous | 1.984% |
| Bid-to-cover | 2.55x |
| Previous | 2.46x |
| Previous date | Sep 16, 2025 |
STIR: Fed Rate Path Holding Two Consecutive Cuts Before Quarterly Clips
Oct-21 10:29
- Fed Funds implied rates are little changed on net overnight, holding close to 50bp of cuts to year-end (consecutive 25bp cuts) before an additional ~50bp of cuts with the June FOMC.
- Cumulative cuts from 4.11% effective: 25bp Oct, 49.5bp Dec, 64.5bp Jan, 77.5bp Mar, 85.5bp Apr and 99.5bp Jun.
- SOFR futures range from -/+1 tick on the day looking out to end-2027, with small losses led by the M6 and gains by 2027 contracts after paring an earlier rally.
- The SOFR implied terminal yield of 2.93% (-0.5bp) holds at recent levels having closed at 2.93/2.935% in the past two sessions. Timing of this terminal continues to flit between the Z6 and H7.
- Thursday’s 2.89% close was the lowest in a month whilst cycle lows were seen at 2.77% back in Sep 2024 in anticipation of an aggressive start to the Fed’s easing cycle at the time.
- Today sees another light data docket, with the Philly Fed non-mfg index along with weekly Redbook retail sales, leaving greater scope for potential spillover from the Canadian CPI report for September ahead of the delayed US release on Friday.
