Wage pressure is building pace as the state administration employees (there are more than 75O thousands of them) demand a real wage boost. The austere Ministry of Finance wants 4.5% increase at most, but it looks as the unions may get a higher increase.
All quiet at the Czech koruna market: The koruna hovers around 35.30 CZK/EUR and as the euro recovers some of its earlier losses (It is back at 0.91 USD/EUR), the koruna strengthened slightly against the dollar to 38.75 CZK/USD.
Czech bonds rose again on Thursday, in a quiet trading. Market is waiting eagerly for Friday's PPI data and government bond auction, we are not sure what will happen in the auction. Anyway, the auction results will be decisive for market development, more than PPI data.
Current benchmark prices: MoF 6.75/05 100.40-70 (+10 bps), MoF 6.30/07 96.45-75 (+20 bps), MoF 6.40/10 95.30-60 (+20 bps).
(Ondrej Schneider and Dalimil Vyskovsky)