WOOD Flash – Czech Republic macro: last of the outsized rate hikes
At its meeting yesterday (22 June), the MPC at the CNB decided to raise the key rate by 125bps, to 7.00%. This move was well reported by the MPC prior to the blackout period, but still exceeded what both we and the consensus expected. Looking ahead, an increasingly dovish MPC will convene for its next meeting in August, with the aim of keeping rates on hold. However, this will be a challenge, given the restrictions on gas supply from Russia, which will drive inflation further. On the back of this, the odds of our alternative scenario – which anticipates a significant reduction in the energy supply from Russia – have strengthened. In this scenario, the tightening cycle will continue, with the key rate peaking at 9.00% next year.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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