The Czech bonds initially got under some pressure as investors wanted to sell on negative regional mood. Nevertheless, the opposite trend on the euro market impeded the price action and the sell-off atmosphere calmed down. The yields added more than 5 bps in the morning panic but gave up more than half of its gains in the afternoon. Today, the market should wait for tomorrow’s central bank’s decision on interest rates. We expect a 25 bps rate cut, which hardly affect the bond market. The majority of the money and bond market counts with the cut. Governmental crisis might not affect the fixed income market.
(CSOB - Investment research)