The Czech yield curve slightly steepened as the front end was unchanged and the long end moved higher by 3 bps. The market seems to be overbought thus its more sensitive to downward pressure than upward one.
Investors wait for tomorrow’s policy meeting of the CNB. However, the bank may not surprise the market, as traders already priced in stable rates in the first half of 2006 and have expected lower inflation outlook. Thus the bonds may again track German Bunds today.
(CSOB - investment research)