Czech bonds tracked German Bunds lower yesterday sending yields 3 bps higher. As usual, the market shrugged off all domestic data and traders were exclusively inspired by external events. A high surplus of the state budget in March at CZK 16 bn is clearly positive for the market. Moreover, the Finance Ministry lowered public finance deficit in the last year from 2.8% to 2.6% of GDP.
Today, the February foreign trade data has little importance for the market. More important might be tomorrow’s 4-year tender, in which the state offers papers worth of CZK 6 bn. However, bonds may mainly watch core markets today. Thus a slightly negative trend may continue.
(CSOB - Investment research)