CZK: Koruna Ticks Higher, Focus Turns To Elections After CNB Rate Decision
EUR/CZK changes hands -0.023 at 24.291 after the CNB delivered a well-telegraphed, widely anticipated decision to keep interest rates on hold and deployed familiar rhetoric, with the Governor leaving all options open for future meetings. Bears look for a sell-off beyond a nearby layer of support defined around the 24.2 mark. Bullish focus falls on the 50-DMA, which intersects at 24.630.
- Local headline flow revolves around the October 3-4 parliamentary elections, with political leaders on campaign trail. Prime Minister Petr Fiala and opposition leader Andrej Babiš were due to appear in online election debates.
- The elections raise uncertainty around Czechia's fiscal outlook amid expectations that the draft 2026 budget may need to be revised, especially if the opposition ANO party claims victory.
- CZGB yield curve has twist steepened. The PX Index is barely changed on the day.
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EGB SYNDICATION: Austria New 7-Year RAGB: Spread Set
- E3bln WNG of the new 7-year Sep-32 RAGB
- Spread set at MS+30 (guidance was MS+33 area)
- Books in excess of €16bn including €2.2bn JLM interest
- Format: Reg S, Bearer, 144A eligible, CAC
- Settlement: 02 September 2025 (T+5)
- Maturity: 20 September 2032 (7Y)
- Size: EUR 3 billion (Will not grow, excluding potential issuer retention)
- Coupon: TBD, Fixed, Ann., ACT/ACT (Long 1st to 20 September 2026)
- ISIN: AT0000A3NY15
- Bookrunners: BofA / DB(DM/B&D) / Erste Group / HSBC / JPM / Raiffeisen Bank International
- Timing: Books to close a 11.15CET / 10.15UKT
From market source
FRANCE: Justice Min Raises Prospect Of Early Election If Bayrou Gov't Falls
France looks set for another period of significant political instability after PM Francois Bayrou effectively called a confidence vote in his own gov't on 25 Aug. Bayrou said that he had requested an extraordinary session of the National Assembly to be convened on Monday, 8 September to "confirm the scale" of spending cuts in the upcoming 2026 state budget, adding that "If you have a majority, the government is confirmed. If you do not have a majority, the government falls".
- The Bayrou gov't has been living on borrowed time for a while now. Formed by the centrist Ensemble bloc and the centre-right Les Republicains (LR), the gov't holds only 210 seats in the 577-member legislature. With the leftist New Popular Front alliance and the far-right Rassemblement National both set to vote against Bayrou, the gov'ts dismissal appears more likely than not.
- With more than a year having passed since that vote, President Emmanuel Macron is at liberty to call another set of legislative elections. Speaking to France 2 TV earlier, Justice Minister Gerald Darmanin said, "Dissolution [of the Assembly] is costly for France, of course, but this hypothesis should not be ruled out."
- Jean-Luc Melenchon, leader of the far-left La France Insoumise (LFI), confirmed in an interview with France Inter that his group will move forward with a motion of impeachment against Macron on 23 September. Melenchon claimed Macron must be removed from office as he is the "cause" of the current political paralysis.
- The collapse of the Bayrou gov't could come at the same time as a major effort by the left to pressure the Macron administration, with the 'bloquons tout' ('black everything') efforts to call a general strike, as well as road blockades and corporate boycotts.
USD: USDNOK is back at pre Powell level
- The Dollar was overall flat during the Overnight session against all G10s, but we are starting to see few pips moves in EUR, GBP, JPY, SEK, USD versus the Nokkie.
- Oil has been under some small pressure, likely helping some of the NOK weakness.
- USDNOK is heading back to pre Powell level, the cross was exchanging hands around 10.1891, now at 10.1780 (prices are according to Bloomberg).
