Czech bonds were little changed yesterday. Nevertheless, the sentiment was slightly negative and sent yields some 2 bps higher. The market lacked clear incentive, as the German Bunds traded sideways. The market ignored PM Paroubek guess, that the economy grows by 7-8 % in the Q1 (see FX part).
Today the Finance Ministry sells CZK 6 bn bonds worth in 10-year auction. Long-dated bonds are more favored among investors, but the current market atmosphere is not supportive for any tender. Nevertheless the result might be better than in the last 5-year auction, which was hardly subscribed. Summing up, we expect demand at CZK 9 bn.
(CSOB - Investment research)