- CE currencies are facing headwinds after poor PMI readings in Germany and France
- Demand for the Czech government bonds remains strong
Central European currencies are currently facing a significant negative correction, which has been triggered by weaker-than-expected PMI’s readings in France and Germany. The biggest regional looser has been the Czech koruna, which has lost 1.4% against the euro during last 24-hours. Recall that koruna’s losses are quite understandable as the Czech economy has strongest links to the German economy. In this respect next-week’s release of the March Ifo might be very important too.
As concern developments in other markets there were very successful government bond auctions in the Czech Republic. The Czech MinFin was selling a 3Y benchmark and 15Y floater. Given the fact that yields had moved higher demand was very strong in both cases as the bid-to-cover ratio reached 8.05 and 3.07 respectively.