The February dynamics industry lagged behind the market consensus
Today we saw another monthly data from the Czech economy. February's industrial production fell by 5.7% y / y and thus lagged behind the market consensus, which foresaw a reduction in activity of 5.0%. Mom after eliminating seasonal effects industry grew by 1.6%. Despite the relatively good mom growth would be very premature to talk about that is beginning to shine on better times.The outlook for the coming months is due to the statistics of orders at home and in Germany favorable, mainly due to the global automotive industry problems. From the Czech point of view it is especially alarming downward trend car registrations in Germany and the EMU as a whole. In annual terms this industry should experience a decline of 1.9%.
February foreign trade according to the cross-border methodology resulted de facto in line with market expectations and our estimate as reported surplus of 28.7 billion CZK. Exports in line with our estimate in February fell by 3.6% year on year and imports by 4.4%, which is still indicative of weak domestic demand.
Tomorrow, the Czech economy will see the March unemployment and inflation. While the unemployment rate, not seasonally adjusted should decrease slightly from 8.1% to 8.0% (due to the effect of seasonal work, which it should have been weaker in March this year due to cold weather), the seasonally adjusted data, we should see an increase in unemployment, This is consistent with the recession in the Czech economy. Consumer price growth should slow slightly in March from February, 1.7% y / y to 1.6% y / y. Mom prices should rise by 0.1%, while it is up should only push food prices.
Rate CZK / EUR today got closer to the level of support around 25.70 and their potential for further downward movement should be limited.
Czech swap yield curve is now changed.
Author: Marek Dřímal
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