Strategy is the Czech cabinet's preoccupation, but sometimes markets rule otherwise. So, while the government planned to hike natural gas (regulated) prices for households by 11% next January, expensive oil makes wreaks havoc into the plan. It seems now that the tariff will go up by 25-37%, possibly in October 2000, maybe in January 2001.
Konsoldacni banka made it public that Komercni banka lent approx. USD 1 mil. to a firm related to the former Komercni banka's CEO, without any collateral. The firm, a succesful Plzen's restaurant is in default now…
The Czech koruna eyed the central bank, as it consolidated its previous gains at the level of 37.40 CZK/EUR. Meanwhile, the hapless euro had a bad day yet again and slipped to 0.916 USD/EUR, a move that rendered the koruna to weaken to 38.60 CZK/USD.
Czech bond market was again very quiet, Tuesday was almost without any trades on the market. The prices remained the same as Monday's closings, market makers did not show any interest in any particular issue, except for MoF 6.50/01, which gained few basis points. We expect Wednesday to be another quiet day, busier trading to start probably as late as next Tuesday, when the CPI figures are released.
Tuesday, August, 2 is the first date when standard settlement for Czech bond market is changed to T+3 from previous standard T+4.
Current benchmark prices: MoF 6.75/05 100.40-70 (unchanged), MoF 6.30/07 96.50-80 (unchanged), MoF 6.40/10 95.90-20 (+5 bps).
(Ondrej Schneider and Dalimil Vyskovsky)