The yield curve shifted lower by 6 bps, while slight bullish flattening occurred. The key incentive was strengthening koruna, which makes domestic bonds attractive in short term horizon. Initially, price action on euro market was supportive, too. Later dip of Bunds didn’t affect the already closed the Czech market. The strong koruna helps the market as a chance for an interest rate cut emerges from fantasy land.
Today no event is expe cted. Thus the market may watch the koruna, Bunds and await the policy meeting of CNB at the end of the week.
(CSOB - Investment research)