CZECHIA: Michl Not Too Bothered By Tariffs, Deems Gov't Spending More Important
Apr-30 07:23
- In an interview with Mladá fronta Dnes, CNB Governor Ales Michl expressed satisfaction with koruna strength and reiterated that under his stewardship interest rates will likely remain higher for longer. The official said that he is 'not very interester in tariffs' as monetary policy targets 'what will happen in a year, two, or more' and by that time 'one shock will pass and another will come.' He argued that wasteful government spending is far worse from the inflation-fighting perspective.
- Michl and his colleagues Zamrazilova and Kubicek spoke at the biannual CNB Discussion Forum yesterday. The Governor said that policymakers 'will definitely remain hawks' and 'will not allow a long period of zero interest rates.'
- The CNB's blackout period starts this afternoon ahead of next Wednesday's rate decision.
- The cabinet holds a meeting from 12:00BST/13:00CEST and is set to discuss the public-finance strategy for 2026-2028, with a media briefing scheduled for 15:00BST/16:00CEST. Note that Czechia will hold a parliamentary election this autumn, which may result in changes to its fiscal strategy.
- Speaking on iDNES.cz, Prime Minister Petr Fiala made his pitch to the voters, arguing that his government needs four more years in office to continue its reforms, and expressed confidence that his Spolu coalition could 'catch up' with polling front-runner ANO before the upcoming election.
- Czechia's GDP expanded by 2.0% Y/Y in 1Q2025, according to advance data released by the CZSO. Sequential growth was +0.5% Q/Q, with both figures falling in line with expectations. A more detailed release will cross the wires on May 30.
- Reminder that Czech markets will be closed tomorrow as the country observes as public holiday.
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GILT TECHS: (M5) Bullish Start To The Week
Mar-31 07:21
- RES 4: 93.79 High Mar 4
- RES 3: 93.01 High Mar 20
- RES 2: 92.55 Trendline resistance drawn from the Apr 4 high
- RES 1: 92.17 50.0% retracement of the Mar 4 - 27 bear cycle
- PRICE: 92.07 @ 08:10 BST Mar 31
- SUP 1: 91.85 Intraday low
- SUP 2: 91.03 Low Mar 28
- SUP 3: 90.55 Low Mar 27
- SUP 4: 90.49 1.618 proj of the Feb 6 - 20 - Mar 4 price swing
The short-term trend outlook in Gilt futures remains bearish, however, today’s gap higher highlights a bullish start to this week’s trading session, and signals scope for a stronger recovery near-term. An extension would open 92.55, a trendline resistance drawn from the Apr 4 high. Clearance of this level would strengthen the short-term bull cycle. Key support and the bear trigger has been defined at 90.71, the Mar 6 low.
EQUITIES: Fresh Selling Seen
Mar-31 07:17
Fresh lows for Euro Stoxx 50 futures after the cash open, with the contract briefly piercing round number support at 5,200.00.
- Tariff worry ahead of “Liberation Day” (Wednesday) the key driver of early risk-off price action seen across global markets this week.
- Background negatives include Israel’s IDF signaling an “intense fight” in Rafah.
EGB FUNDING UPDATE: Finland Q2 Funding Plans
Mar-31 07:16
- 3 RFGB auctions for E1.0-1.5bln each on 15 April, 20 May and 10 June.
- "The net borrowing requirement is estimated at EUR 12.289 billion, resulting in a gross borrowing amount of EUR 41.744 billion. Approximately EUR 24.3 billion of this amount is expected to be covered with long-term debt, and the rest (17.4 billion) with short-term debt."
- Finland has confirmed they are "planning to issue a second new euro benchmark bond of the year, likely in a 10-year maturity" - we had pencilled in an April (or potentially May) E4bln launch for a new 10-year Sep-35 RFGB in our Eurozone Issuance Deep Dive.
- 2 ORI operations in Q2 for E0-400mln each on 3 April and 26 June. For Q3/4, ORIs scheduled for 28 August, 30 October, and 27 November, all E0-400mln.
- "As in previous years, bonds may be issued under the EMTN programme to complement the funding in euro benchmark bonds during the year, market conditions permitting."
- 3 RFTB auctions are planned for E1-2bln each on 8 April, 13 May, and 3 June.
- "In addition to Treasury bill auctions, a tap issuance window may open during the second quarter of the year."
- "The next Quarterly Review will be published on 27 June 2025."
