CZK: Koruna Tad Softer, Election Chatter In Focus
EUR/CZK trades at 24.524, a touch higher on the day. The 50-DMA provides the initial layer of resistance at 24.606, while bears look for a pullback towards Aug 11 low of 24.389.
- Czechia is counting days to the October 3-4 parliamentary elections. Spolu and STAN leaders yesterday committed to refrain from any cooperation with the main opposition ANO party. Some critics have argued that this could force ANO into a coalition with more radical SPD and Stačilo! parties. A mandaty.cz model still shows ANO as the front-runner, projecting its number of MPs in the 200-seat lower house at 72.
- CZGB yields have reversed initial downticks; the PX Index sits 0.4% lower, extending its recent grind lower.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
US TSY OPTIONS: TYU5 106.25 Puts Sold
TYU5 106.25 puts 3K given at 0-01.
FOREX: FX OPTION EXPIRY
Of note:
USDJPY 2.06bn at 148.00/148.25.
EURUSD 1.47bn at 1.1650 (tue).
USDCAD 1.7bn at 1.3770/1.3775 (wed).
AUDUSD 1.01bn at 0.6550 (wed).
EURUSD 2.2bn at 1.1600/1.1610 (thu).
- EURUSD: 1.1650 (208mln), 1.1700 (266mln), 1.1750 (613mln).
- USDJPY: 148.00 (1.02bn), 148.25 (1.04bn).
- GBPUSD: 1.3400 (355mln), 1.3495 (450mln).
- AUDUSD: 0.6550 (555mln).
GILTS: /STIR: Goldman Hold Long SONIA Vs Euribor, Eye On QT & Reduced Gilt Risk
Goldman Sachs note that “despite the previous week’s inflationary speed bump, the UK curve outperformed last week, as soggy activity data insulated gilts from bearish price action in other markets. This muted spillover points to the continuing calming in UK-specific risk premium that had been a feature of UK macro assets in recent years. As inflation risk subsides, the half-life of bouts of gilt volatility seems to be shrinking”.
- They go on to suggest that gilts should “get additional support as the BoE slows the pace of QT from October onwards. Although the pace of active sales picks up in our forecasts, we expect the BoE to skew away from long-end sales. As a result, we maintain our constructive GBP vs EUR rates and continue to recommend long SFIZ6 vs. ERZ6”.
