As the state budget discussion approaches the parliament, the contract-opposition ODS turns up the heat: it refuses to support any new bond issuance program of the Cabinet and urges the government to use the Konsolidacni banka instead. We discussed the prospect of the Czech bond market in more details in our August Macroeconomic Focus that can be downloaded here: Macroeconomic Focus
The Czech koruna spent Monday languishing at around 35.35 CZK/EUR level. The koruna yawned the balance of payments data that were broadly in line with expectations. As the euro "stabilized" below the 0.90 USD/EUR level, the koruna weakened marginally vis-a-vis the dollar to 39.40 CZK/USD.
Czech bonds were quiet on Monday, though the mood was more bullish in the morning - after two consecutive bearish days. Corporate issues were the most rising, with KB12 leading with more than a trading spread strengthening.
Current benchmark prices: MoF 6.75/05 100.20-50 (+10 bps), MoF 6.30/07 96.90-20 (unchanged), MoF 6.40/10 95.90-20 (-5 bps).
(Ondrej Schneider and Dalimil Vyskovsky)