Czech Inflation Falls to 2.1% as June CNB Rate-Hike Odds Stay Alive
Updated
Updated · ING Think · Jun 5
Czech Inflation Falls to 2.1% as June CNB Rate-Hike Odds Stay Alive
1 articles · Updated · ING Think · Jun 5
Summary
Czech annual inflation slowed to 2.1% in May from 2.5%, undershooting expectations and surprising markets that had turned more hawkish after Czech National Bank comments about a possible June rate hike.
Markets initially rallied on the softer CPI print, but by the end of the day still had almost one full rate hike priced in, showing investors see the inflation miss as insufficient to rule out tightening.
Upside wage data added to that hawkish case, while EUR/CZK stabilized around 24.200 after breaking out of its long-held range.
The June CNB meeting is now seen as finely balanced: ING economists' baseline is no change, but they say the probabilities lean toward a hike, with more guidance from policymakers expected next week.