Czech bonds witnessed a see-saw session yesterday. Key movers were the same as on the core markets: London blasts and Chinese yuan revaluation. The market opened in a positive territory, as Bunds did. Of course, bonds headed down in first reaction to the revaluation, but they partly recovered later. London blasts had opposite effect, but they had much lower impact than the blast two weeks ago. Czech bonds’ slide was a bit smaller yesterday, because the spread over euro yields was slightly broader after last couple of days. Despite wild price action, market activity remained low. In the end, bonds were little changed yesterday. Today the calendar is empty in Czechia and even on core markets. Hence the markets may digest yesterday’s events. Rangebound price action seems to be most likely.
ČSOB - Investment Research