Czech bonds rose yesterday, as the market followed German bunds. The yields lost some 5 bps across the board. Despite significant gains of bonds the activity was minimal. Many traders have still significant long position, which they don’t want to enlarge. Moreover, the situation on the market is shaky, and only few people believe in significant and long lasting bond gains.
Today the market might be under pressure since US Treasuries were hit by change in FOMC inflation outlook. European market will hardly track the treasuries price action completely, but visible losses are likely in the morning.
(CSOB - Investment research)