On Wednesday, the Czech Finance Ministry release the detailed bond issuance calendar for the second quarter of 2006. It plans to sell bonds for an amount of 40 bln in Q2, the same as in the first quarter of the year. In line with the MOF strategy, the biggest part of the issuance will be in bonds with longer maturities (2015 and 2020). Nevertheless, there was some moderate pressure on bonds at the long end of the curve after the announced. The Government plans to sell CZK 110 bln worth of bonds (+/– 10 %) for the entire year. Aside from the issuance calendar Czech bonds basically kept a close eye on core market movements. At the end of the day longer-term yields were slightly higher in line with core Europe. Shorter maturities outperformed and were almost unchanged (probably due to ongoing CZK strength). Late in the session, the Finance Ministry announced a small SKK 558 mln deficit for the first two months of 2006. This keeps the cumulative budget surplus head of schedule compared to last year.
(CSOB - Investment research)