CZECHIA: Q2 Wage Growth Beats Expectations
- Czechia's real wage growth accelerated to 5.3% Y/Y in Q2 from +3.9% prior, exceeding Bloomberg consensus forecast/CNB projection of +4.3%. In nominal terms, wages rose by 7.8% Y/Y in the three months through end-June, which topped the +6.7% pencilled in by the CNB in its Summer Forecast. These figures support the case for an interest-rate pause going forward, but tomorrow's flash CPI reading for August will provide another important data signal.
- ANO leader Andrej Babiš took a brief break from the election campaign after being attacked by an attendee of his rally and suffering minor injuries. The police apprehended the attacked on the scene and launched an investigation into the incident, while ANO politicians accused their political rivals of a 'campaign of hatred'.
- Seznam Zprávy reported that President Petr Pavel commissioned a legal opinion on whether he could appoint a Prime Minister who would have a conflict of interest. The analysis is believed to be related to business tycoon Andrej Babiš's bid to become Prime Minister as his party remains the front-runner ahead of the upcoming election.
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SWITZERLAND DATA: Transport Services Dragged Up July CPI Print
Looking at the details of the Swiss CPI print, upside momentum from transport and recreation categories stands out (contributing a combined 0.21pp more than in June). Overall it remains that this was the second consecutive positive print in Swiss CPI.
⦁ Transport services (airfares but also "public transport abroad" in particular) and package holidays (part of recreation category) were behind the acceleration here, having seen higher Y/Y prints this time - that might help explain parts of the unusual higher services / imported inflation combination.
⦁ Food inflation meanwhile has fallen this time, contributing 0.06pp less than in June.
⦁ Further details see table / chart below:
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GILTS: A slightly lower Open versus the Calls
- Gilt saw a slightly lower open vs the calls, this was driven by the tick lower in EGBs on the higher Equity Cash Open.
- Gilt futures was expected to somewhat outperforms, but it is so far sitting flat against the German 10yr on the spread.
- Respective initial support and resistance, stand at 91.86 20-day EMA , and 92.69 (Friday's high).
