On Friday, the Czech koruna shot up considerably as the rest of the market digest Thursday's

On Friday, the Czech koruna shot up considerably as the rest of the market digest Thursday's vote and MinFin Sobotka's comments regard the euro bond issue program. Hence, the EUR/CZK moved to 32.25 zone. Mainly London banks entered short euro position against the koruna. Nevertheless, the reaction was exaggerated in our view because Sobotka didn't revealed much new information. June's euro bond issue worth EUR 1 bn have been known for long time. Moreover, even Finance Ministry intention to issue bonds worth EUR 1 bn every year by 2006 is not new. Hence, we expect correction in days to come. However today, most probable scenario is continuation of mild appreciation.

ČSOB - Investment Research