The Czech bonds inched higher yesterday, the yields erased only few bps. The key incentive was the price action of German Bunds, but the Czech market was rather reluctant to track them precisely. Domestic bonds only mirrored the direction but movements were much smaller than on core markets. Hence bonds opened little weaker, but they more than removed all losses by the end of the session.
Today the bonds might look at German Bunds again. The market may get a bit nervous ahead of the CNB’s Board meeting on Thursday. Nevertheless, no one (including us) expects any action. Yet the same expectation was before the last meeting, when the bank cut rates.
(CSOB - Investment research)