• Czech industrial production (adjusted for the number of working days ) in April rose 0.9% M/M and 2.0% Y/Y, it’s statistical office reported. Admittedly, the improvement was mainly due to a strong performance of electricity producers and the improved situation in the mining industry. The manufacturing industry is lagging, stagnating year‐on‐year. Even so, the trend for the most cyclical parts of the Czech industry, led by engineering and basic metals producers, also shows a slow reversal for the better. This is confirmed by new orders ‐ base metal producers +3.2% YoY, engineering +2.0% and fabricated metal products +8.6%. On the other hand, production in the automotive segment will undoubtedly grow more slowly this year as it is bumping up against a relatively high comparison base versus last year and relatively high‐capacity utilization. Overall, the better industrial figures in April, together with very strong retail sales, show that, at least at the start of Q2, the Czech economy has been still in good shape. This comes on the back of a very strong first quarter, when it grew by 0.8% Q/Q. So, for now, we haven’t seen a significant impact of the higher US tariffs. The Czech koruna remains well bid, with EUR/CZK at 24.75, touching the best levels in almost a year’s time. • According to Bloomberg reporting referring to people familiar with the matter, Bank of Japan officials are likely considering slowing the pace of its pullback from buying government debt at the June 17 policy meeting. Officials are said discussing making smaller reductions to the BOJ’s bond buying program from current pace reducing net purchases by JPY 400 bln per quarter scheduled to be in place until March next year. From then, aside from keeping current pace of a JPY 400 bln reduction, options of reducing the pace of the slowdown to JPY 200 bln or between JPY 200 bln and 400 bln are said to be on the table. The debate on the pace/amount of BOJ bond buying recently intensified due to rising pressure at the long end of the Japanese government bond curve as investor appetite was low to pick supply in these longer tenors, sharply rising yields at those longer maturities.
|
0 Comments