The Czech yield curve slightly steepened
yesterday, as the front end was almost
unchanged and the long end added 4 bps.
The bonds were inspired at Bund market,
where yields rose over European trading.
Moreover, domestic figures showed strong
growth of the Czech economy. Rather
benign March inflation hardly could have
reversed the mood. In the end, the market
was lower despite the Bunds traded slightly
stronger. Yesterday’s figure didn’t alter our
view that the official rates will rise no sooner
than in July. Since inflation remains below
the target, the central bank isn’t in a hurry to
raise rates quickly. Moreover, the koruna
remains stronger than the bank considers as
appropriate.
Today, the domestic calendar is empty and
also tomorrow’s data on current account are
little important for fixed income market.
However the German ZEW index might draw
attention, as it may set atmosphere on the
Bund market.
(CSOB - Investment research)