Czech bonds fell significantly in recent days, as they tracked core markets lower. That has sent 10-year yields lower by some 12 bps to 3.71 % in the two days. The yields rose also on the back of rather bearish expectation ahead of the policy meeting of the central bank (see the FX part). As there is wide consensus that the bank will stay on hold today, an eventual rate cut or dovish comment would be a big surprise. Therefore the central scenario is that the bonds may stay flat today. Unless the central bank surprises, the market may watch core markets.
(CSOB - Investment research)