Following similar movements on the regional markets, the Slovak koruna gave back the gains registered in previous days. It weakened towards 37.40 at the start of the trading a held a tight range close the area 37.35 during most of the morning session. The unit, however, returned to stronger territory in line with regional FX moves in the afternoon and closed at 37.31.
Today, the debt agency ARDAL offeres a 20Y issue SLOVGB 4.50%/2026 for the first time. In previous four auctions of state bonds, the ARDAL rejected all bids and it will be interesting to see if it breaks this practice. We expect only modest demand stemming mainly from institutional investors. The koruna should not be influenced by this tender and will further watch regional and global factors. In this sense today’s US payrolls will be the key for the local currency through the development of the EUR/USD rate. However, we do not expect major movements to occur, instead settling down in a sideway trading pattern again for the short-term .
On Monday, the market is closed in observance of the national holiday. The next week, the economic calendar is well packed with the market focusing on the April CPI and March foreign trade data.
(CSOB - Investment research)