There was almost no activity, bonds only followed core markets sideways. Today the market might get nervous since the central bank will decide on interest rates on Thursday. We keep our scenario that the bank will cut 25 bps, but the condition changed significantly. The main factor behind the loosening of the monetary policy, the strong koruna, changed significantly. The koruna lost all of its gains made since the January’s CNB meeting. Thus the cut is not 100 % sure. Nevertheless, all other factors, namely positive inflation outlook, look still supportive for the cut.
(CSOB - Investment research)