Czech bonds slightly fell yesterday, as they followed core markets. Investors took profits worldwide, thus Czech yields added some 4 bps across the board. The activity was low as usual. The only event which grabbed traders’ attention was speech of Robert Holman, member of the CNB Board. He said that the bank should not fine tune the monetary policy. He prefers stability of interest rates to their frequent changes and doesn’t asses inflation in range 2-3 % as a undershooting of the inflation target (actually set at 2-4 %). Holman only confirmed that he belonged to the hawkish wing in the Board. It’s known from previous meetings that he opposed necessity of cutting interest rates. Thus his worlds doesn’t change the minimal chance for the rate cut on the upcoming Board meeting. As Reuters showed all analysts expect the central bank would stay on hold next Thursday. Today core markets’ price action may drive the Czech market, as no domestic event is expected.
(CSOB - Investment reserarch)