Czech bonds tracked core markets yesterday, hence initially they fell to recover later. In the end, the bonds closed little stronger, but they should open again weaker today due to little drop of bond prices in American trading.
Today the key event will be the tender of the new 10-year benchmark with a coupon 3.8 %. The Finance Ministry will offer bonds worth CZK 13 bn. The amount is higher than in tenders in Q1, but we expect enough bidding interest, as institutional investors need new benchmark into their books. Moreover there will be only one tender per month in Q2, while there was two tenders per month so far. We do not expect any reaction to today’s government meeting.
(CSOB - Investment research)