Consumer prices rose by 0.6 %
and brought annual inflation to 1.8 %. That’s
level where it was at beginning of the year
before it touched 1.3 % in May. However,
there was no demand inflanationary
pressures behind the spike of inflation. It
was cause by antitrust office which order to
rise telecommunication fees. Hence no
change in wait-and-see policy of the central
bank is likely. We do not expect any action
in 9-month horizon. Other yesterday’s data
releases were little important for the market.
Labor market proved positive trend in
unemployment is still actual. CNB Board’s
minutes showed unanimous vote on the last
meeting, where Board decided to leave rates
unchanged. Balance of payments data had
no impact on the market.
Today the key event will be a tender of new
5-year benchmark. The Finance Ministry will
sell bonds worth CZK 9 bn. We expect
demand will surpass supply, but bid/cover
ration will be rather below average of
previous tenders. Development of core
markets will be again important for the
market, while industrial output data might
have little impact.
Czech 4-year benchmark yield rose ahead
of today’s tender.
(CSOB - Investment research)