– Risk rallies in Asia
– China’s industrial profits fall
– US durable goods orders likely weak at headline, strong at core
What to watch for today
CZK: On hold. Our economist expects the central bank to keep rates on hold today, in contrast to the market consensus expectation for a 25bp cut. The previous voting pattern suggests at least three out of the seven MPC members are likely to support the cut and it is a close call if a majority can be gathered for the motion. If rates remain on hold, we would still envisage a dovish statement supporting expectations for further easing in the future and therefore a limited positive impact on the exchange rate. With low yields, a very dovish central bank and weak data, we continue to expect CZK underperformance. We are long USDCZK in our cash suggested portfolio (for details, please see our report).
Click here to read the full report: FX Daily
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