CZECHIA: Reports Shows Czech Economy Would Be Ready For Adoption Of Euro In 2024
Nov-23 08:28
- The annual report prepared by the Ministry of Finance and the CNB suggested that Czechia will be ready to adopt the euro in 2024, but advised that the government should not take steps to that effect. However, four out of five parties of the current ruling coalition support the adoption of the euro. The only party opposing a switch is Prime Minister Petr Fiala's and Finance Minister Zbynek Stanjura's ODS. Hospodarske Noviny reported that Stanjura is now trying to convince fellow ministers from TOP09, STAN, Pirates and KDU-CSL to rule out efforts to join the eurozone next year.
- Prime Minister Petr Fiala said that the education sector strike scheduled for Monday is "irresponsible" and accused trade unions of having a confrontational stance since the inauguration of his government and taking advantage of the current difficult budgetary situation.
- CNB's Karina Kubelkova told Seznam Zpravy that the traditional January repricing of goods and services provides a source of "big uncertainty" as its impact could be "significantly higher" than assumed in the latest macroeconomic forecast. She added that policymakers are concerned "for now", even as the disinflation trend is expected to resume early next year.
- Prime Minister Petr Fiala, Finance Minister Zbynek Stanjura and CEZ CEO Daniel Benes will hold a joint media briefing on energy security at 09:30GMT/10:30CET. As a reminder, a parliamentary committee adjourned for the third time the debate on a bill that would make it easier to revamp CEZ's structure.
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RBA: AUD & ACGBs Look Through Bullock’s Comments
Oct-24 08:23
YM & XM are essentially unchanged on comments from RBA Governor Bullock, as she failed to meaningfully move the needle.
- AUD/USD also looked through the headlines, essentially printing unchanged vs. pre-release levels.
- A quick reminder that the minutes from the RBA’s most recent policy meeting had already provided a hawkish surprise for markets, noting that “the Board has a low tolerance for a slower return of inflation to target than currently expected.”
- At the close of OIS trade (a few hours ahead of the release) the market was pricing ~25.5bp of further tightening in the current cycle i.e. a 25bp rate hike was fully priced. Terminal policy rate pricing remains a little shy of last week’s highs.
- Today’s address saw Bullock stress that “the Board will not hesitate to raise the cash rate further if there is a material upward revision to the outlook for inflation.” Note this was caveated with “at the same time, the Board is mindful that growth in demand and the rate of inflation have been moderating, and that there are long lags in the transmission of monetary policy.”
- She also highlighted that “there may sometimes be a need to balance the various objectives and this requires careful judgement. It is incumbent upon the Board to be transparent about when and how it is doing this.”
EUROZONE DATA: Higher Oil Prices Outweighed By Softer Demand Outlook
Oct-24 08:16
Eurozone PMI printed below expectations in both services and manufacturing, likely driven by the weakness in the German prints released earlier. Some select notes from the release include similar themes to the French/German prints, though there is some indication that weakening demand is offsetting the inflationary impulse from higher oil prices in the last months:
- "Despite reports of higher oil prices having added to firms’ costs over the month, the average cost of inputs into factories fell sharply in October amid discounting as supply exceeded demand"
- "The downturn in new orders and the accelerated depletion of backlogs of orders prompted firms to reduce employment for the first time since January 2021."
- "Average prices charged for goods and services rose at a marginally weaker rate in October".
- The release notes that ex-Germany and France, "the latest fall in the rest of the region was the largest for a year thanks to a steepening manufacturing downturn and a renewed fall in services activity".
ECB: Eurozone Credit Standards Tighten Further In Q3
Oct-24 08:06
ECB Bank Lending Survey shows credit standards across the euro area tightened more than expected in Q3 -- on MNI Policy MainWire now, for more details please contact sales@marketnews.com.
