CZECHIA: MNI CNB Review - May 2025: Nearing Touch Down
May-08 10:43
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Executive Summary:
- The Bank Board voted 6-1 to deliver a “very cautious” 25bp cut.
- Risk assessment was changed from ‘inflationary’ to ‘modestly inflationary’.
- Board members did not reach consensus on whether it was the final cut in this cycle.
A majority of six out of seven Bank Board members backed a 25bp cut to the two-week repo rate, outvoting a dissenter calling for a hold. This brings the main policy rate to 3.50%, the upper end of the range of estimates of its neutral level, suggesting that the rate-cutting cycle is drawing to an end. Manageable domestic inflation and a decline in imported inflation risk were cited as main reasons behind the decision, although a familiar list of risks continues to limit the room for any further easing. Despite some of the rhetoric being perhaps less hawkish than expected, we think that the CNB will tread with growing caution as the rate-cutting cycle seems to be entering its terminal phase.
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OUTLOOK: Price Signal Summary - Bear Cycle In Oil Remains Intact
Apr-08 10:41
- On the commodity front, the trend condition in Gold remains bullish and the latest pull back appears corrective. Moving average studies are in a bull-mode position highlighting a dominant uptrend and positive market sentiment. Price has traded through the 20-day EMA. The next key support to watch lies at 2945.3, the 50-day EMA. A resumption of gains would refocus attention on $3196.2, a 3.236 projection of the Nov 14 - Dec 12 - 19 price swing. The bull trigger is 3167.8, the Apr 3 high.
- In the oil space, a bearish theme in WTI futures remains intact following the recent impulsive sell-off. The move down has resulted in the breach of a number of important support levels. The break reinforces a bearish threat and, despite the trend being in oversold territory, signals scope for a continuation of the bear leg. Sights are on $57.79 next, a 2.236 proectionj of the Jan 15 - Feb 4 - 11 price swing. Initial resistance is seen at $64.85, the Mar 5 low and a recent breakout level.
OUTLOOK: Price Signal Summary - Monitoring Support In GBPUSD
Apr-08 10:29
- In FX, EURUSD has pulled back from its latest high. For now, the trend condition remains bullish and a move down is considered corrective. A key resistance at 1.0955, the Mar 18 high, was breached last week, confirming a resumption of the uptrend. It paves the way for a climb towards 1.1188 next, a 0.764 projection of the Feb 28 - Mar 18 - 27 price swing. MA studies are in a bull-mode position highlighting a dominant uptrend. Initial firm support to watch lies at 1.0833, the 20-day EMA.
- GBPUSD traded sharply lower Monday, extending the retracement from the Apr 3 high. For now, the sell-off appears corrective. Price has traded below the 50-day EMA - a concern for bulls - however, MA studies are in a bull mode position and this highlights a dominant uptrend. A recovery would open 1.2899 and 1.3017, the 38.2% and 61.8% retracement of the Apr 3 - 7 sell-off . A move through Monday's 1.2709 low, would instead signal scope for a deeper retracement. This would open 1.2654 50.0% retracement of the Jan 13 - Apr 3 bull cycle.
- USDJPY maintains a bearish tone following last week’s sharp sell-off and the latest recovery is - for now - considered corrective. A resumption of the downtrend and a break of last Friday’s 144.56 low would signal scope for an extension towards 144.13, the 76.4% retracement of the Sep 16 ‘24 - Jan 10 bull leg. Initial firm resistance to watch is 149.00, the 20-day EMA. Resistance at the 50-day EMA, is at 150.33.
LOOK AHEAD: Tuesday Data Calendar: SF Fed Daly Outlook, Tsy 3Y Note Auction
Apr-08 10:25
- US Data/Speaker Calendar (prior, estimate)
- 08-Apr 0600 NFIB Small Business Optimism -- reported 97.4 vs. 100.7 prior
- 08-Apr 1130 US Tsy $70B 6W Bill auction
- 08-Apr 1300 US Tsy $58B 3Y Note auction (91282CMW8)
- 08-Apr 1400 SF Fed Daly economic outlook
