Czech bonds weakened in step with core markets on Friday. However, the curve twisted ones again, as short dated bonds were able to inch higher. The risk of a rate cut keeps the front end falling, while negative downward pressure of rise in euro and dollar yields override rate cut bets on the long end of the curve. The pivot point was at 5-year.
The calendar looks unattractive until Friday, when the minutes are due. The January state budget balance is due on Wednesday, but it rarely affect the market. Therefore traders may watch core markets, especially the ECB and the FOMC meetings, and the koruna.
(CSOB - Investment research)