A draft of the state budge for 2001 is currently before Parliament, where a vote is expected on Friday. The opposition ODS and the minority governing CSSD are to meet today and tomorrow to discuss the budget. We believe that the ODS will support the budget in Parliament and that the budget will be passed in the first vote.
The Czech National Bank yesterday released the minute's of the CNB's last board meeting. The bank board highlighted that the development of public budgets may threaten the stability of the Czech economy in the coming years if not addressed.
The Czech koruna was relatively stable yesterday, fluctuating around 35.5 CZK/EUR and 41.6 CZK/USD.
Bonds fell in quiet trading on Tuesday. The prices still did not reach the lows from Friday, however we are still not much convinced they would not do so in a few days again. Still the longest bonds were falling most, with EIB 8.20/09 leading the way, and, some corporates have been on sell side. We suppose Wednesday to be quiet day again, bearish mood is more likely.
Current benchmark prices: MoF 6.75/05 99.15-45 (-10 bps), MoF 6.30/07 94.85-15 (-15 bps), MoF 6.40/10 93.40-70 (-10 bps)
(Monika Procházková and Dalimil Vyškovský)