The yields lost 5 bps across the board again, but the market was quiet despite the central bank cut interest rates by 25 bps. It was widely expected decision which bring Czech repo-rate to 2 % in par with eurozone key rate. The governor Tuma comments after the meeting were interesting. He said, that there was suggestion for even higher cut as well as suggestion for holding rate unchanged. He added that he was not able to predict the future direction of interest rates. He said, that for the monetary policy would be decisive April’s Inflation and GDP outlook. Thus it seems that the rates may stay at 2.00 % for some period now. The bond market completely ignored the development of the government crisis. Today the market might wait for the afternoon US data which may move the markets worldwide.
(CSOB - Investment research)