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Czech inflation surprise strengthens case for hawkish CNB

Societe Generale cited a rise in Czech inflation from 1.9% in August to 2.5% in September, keeping focus on core and services data ahead of a potential November CNB move.

Reported · Written up by our desk · Central Banks

Societe Generale said a surprise upside in Czech inflation has reinforced the Czech National Bank’s hawkish stance, a view that is seen as supportive for the Czech koruna against the euro.

In a note cited by FXStreet, the bank pointed to inflation rising from 1.9% in August to 2.5% in September, while noting that policymakers have signaled the next CNB move could be either a hold or a hike.

Attention now turns to a data breakdown scheduled for October 13, specifically core and services inflation, which the outlet said could determine whether underlying price pressures remain strong enough to support further tightening.

With a higher probability of additional tightening, the material says there is a risk that EUR/CZK could move sustainably below 24.50.

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