In an excellent article Vaclav Klaus, the economist, writes that the state expenditures must be cut, social spendings re-juggled. The state is much too strong, he writes. The author even distingushes structural and cyclical parts of the budget deficits, one only wonders who actualy was running the country when the structural deficit was at its high (in 1996 and 1997) and when social system as we know it was build…
Mr. Pithart, a former dissident and currently a vice speaker of the Senate, leads in his district with preferences at 39% and seems easily ahead of an ODS man and, more importantly, of the chief adviser to the prime minister, notorious Mr. Slouf.
The Czech koruna remains stable at 34.85 CZK/EUR and 41.85 CZK/USD.
Thursday was not positive for bonds. After slightly bullish Wednesday another sell-off came to the bond market. Corporates were the losers of the day, dropping more than a trading spread, however longest government bonds followed them soon. Friday will probably not be positive as well, but we do not expect trading to be very busy.
Current benchmark prices: MoF 6.75/05 99.00-30 (-15 bps), MoF 6.30/07 93.95-25 (-20 bps), MoF 6.40/10 91.85-15 (-30 bps).
(Ondrej Schneider and Dalimil Vyskovsky)