HALISTER1: ING Sees Czech 2-Year Yield Below Minus 1% Before Koruna Cap End

ING Sees Czech 2-Year Yield Below Minus 1% Before Koruna Cap End

(Bloomberg) -- Investors to step up bets on koruna gains in coming months before Czech central bank removes currency cap, ING economists Jakub Seidler and Petr Krpata write in report.
  • Rate on 2-year sovereign notes to drop below minus 1% “sooner or later once inflows intensify” from minus 0.59% now
  • ING estimates Czech National Bank sold CZK70b-CZK80b in September FX interventions as demand for koruna spiked
  • ING reiterates its call for CNB to end FX cap in 1H 2017
  • At policy meeting on Thursday, CNB “might try to keep a dovish stance to calm the market” with “verbal intervention”
  • NOTE: Czech Koruna Cap End Won’t Spur Steep Gains, Central Banker Says Link
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Jakub Seidler (ING Groep NV)
Petr Krpata (ING Groep NV)

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