The yields rose along the
most of the curve. The huge May
construction activity rise wasn’t important
for the market. The output shot up 26 % y/y
due to advantageous comparative base.
Nevertheless, the figure puzzled well into
negative market atmosphere. The Finance
ministry announcement, that it suggested
central government deficit at CZK 76.4 bn
or 3.8 % of GDP in 2006 was more or less
neutral.
Today the calendar is busy. Above all the
June inflation, which posted 0.6 % m/m rise,
may support negative market atmosphere.
Consumer prices were up mainly due to
one-off jump in telecommunication prices.
Dominant fixed lines operator was pushed to
cancel free minutes in contracts by
antimonopoly office. Hence it doesn’t mean
a rise in inflationary pressures and the
central bank could continue its wait and see
policy. Moreover, the June CNB Board’s
minutes may lure some attention of the
market. However, development of core
markets might be ones again the most
important clue for the market.
(CSOB - Investment research)