The Cabinet is to decide on the privatization of power and gas sector. We remain skeptical and do not expect any firm decision. Perhaps, it would be the better outcome, given the wacky proposal of the Ministry of Industry and Trade…
The koruna took a battering yesterday in what was one of its biggest losses in recent days. The jittery market was triggered by worse-than-expected Polish current account data on Monday and continued yestarday. The koruna lost another 10 hallers and closed at 37.75 CZK/EUR and at 40.80 CZK/USD. All eyes will be now at the September CPI figure that is to be released on Monday, October 9.
Czech bonds dropped a bit on Tuesday, continuing the trend. The downfall was only within one trading spread, as prices are becoming bit too low, and some corporate issues even strengthened. The trading was quiet as usually, though we have made some trades, unlike last week. The market is likely to wait for Friday's bond auction, or Monday CPI figures, so we do not expect much action on Wednesday.
Current benchmark prices: MoF 6.75/05 100.05-35 (-5 bps), MoF 6.30/07 95.80-10 (-15 bps), MoF 6.40/10 94.80-10 (-5 bps).
(Ondrej Schneider and Dalimil Vyskovsky)