CZK: Strong Q2 GDP Data Support Koruna

Upbeat domestic GDP outturn has lent support to the koruna, elevating it to the top of the EMEA scoreboard. EUR/CZK last trades -0.034 at 24.500 and bears look for a move towards Aug 11 low of 24.389. Initial resistance is provided by the 50-DMA at 24.595.

• Preliminary data from the CZSO showed that the economy expanded by an above-forecast 2.6% Y/Y in Q2 amid a sequential growth of +0.5% Q/Q (versus +0.2% expected). The CNB pencilled in +2.7% in its Summer Forecast and will release further comments at 12:00BST/13:00CEST.
  • Česká spořitelna point to significant upward revisions relative to the advance reading and note that the economy remained resilient in the face of German weakness and US tariffs. They note that household consumption was the main driver of growth, but exports declined. They expect GDP to grow by slightly more than 2% this year and next, before accelerating to +2.7% Y/Y in 2027.
  • Komerční banka draw attention to some negatives, noting that household consumption lags pre-pandemic levels despite strengthening, investments were driven by the public sector, while exports weakened significantly. They see a significant slowdown in growth momentum in May and June, noting that they expect the economy to grow by 1.9% this year and by just 1.1% next year.
• Czechia's M2 money supply printed at +3.0% Y/Y in July, staying close to a cyclical low of +2.9% registered in June.
• CZGB yields sit close to neutral levels; the PX Index has shed 0.3%, extending its recent corrective downtrend.