The bouncy Czech koruna gained further 10 hallers against the euro, as market was testing yet new level of the Czech National Bank resistance. Also, the National property Fund made it public that it had received DM 280 mil as the first installment from the Erste Bank and that it will indeed transfer the amount to Konsolidacni banka. This morning, central bank canceled its regular Thursday meeting, a sign that no intervention is in offing for the rest of the week.
Bond market was very quiet again on Wednesday. The mood is rather bullish, as prices shifted down some basis points after only a few trades has been done. The only issue traded seemed to be MoF 6.40/10, slipping some 25 bps down, these trades actually took the whole yield curve up.
It is hard to predict some action for next days, as it looks like it will again be that quiet. However, market is still offering quite aggressively, so we do not recommend building up long positions.
Current benchmark prices: MoF 6.75/05 100.30-60 (-10 bps), MoF 6.30/07 96.40-70 (-10 bps), MoF 6.40/10 95.65-95 (-25 bps).
(Ondrej Schneider and Dalimil Vyskovsky)