The koruna correction Czech bond yields rose by 4-8bps yesterday in relation to the koruna weakening. Negative sentiment in the region didn’t discourage the domestic investors on the bond market. The demand for new issue of a 5Y government bond was twice higher than the Ministry of Finance offered and the average yield reached 2.831 % in line with yields on the secondary market. There is a huge pile of free domestic cash in the market and therefore the Ministry of Finance could not be afraid of the lack of interest in government securities. changed rate cut expectations. While some days ago a part of the market bet on higher than a 25bps cut, now the market believes that the CNB will cut the repo rate only by 25 bps to 2%.
(CSOB - Investment research)