CZK: Close call as to when CNB will hike - ING

Analysts Jakub Seidler and Petr Krpata at ING expects a 25bps hike either this week or at the Nov meeting, but see greater odds of the latter (60% probability of a hike in a Nov vs. 40% of a hike on Wed).

Key Quotes

“This isn’t necessarily for fundamental reasons but rather due to the publication of the CNB’s Inflation Report and a new set of forecasts at the November meeting. In terms of trade ideas, we position for a narrower 9x12 PLN-CZK FRA spread, with markets underestimating the pace of the CNB hiking cycle over the next 9 months – while overestimating the scope for NBP hikes.”