Czech bonds inched higher yesterday, as they tracked German Bunds. The yields lost some 5 bps at the long end of the yield curve. A positive sentiment lure investors interest, therefore the market activity was higher than usual. Some pre-positioning ahead of today’s tender might have occurred. As we wrote, the key event is tender of 4-year benchmark today. The Ministry of Finance will offer bonds (3.8/2009) for an amount of only CZK 8bn, which is a rather small amount given the new practice of only one auction per month. Hence there might be enough interest among investors to buy this whole amount.
(CSOB - Investment research)