Czech bond market waited for the CNB’s minutes and inflation report on Friday

Czech bond market waited for the CNB’s minutes and inflation report on Friday. The dovish stance of the central bankers moderated the rate hike expectation and led to the fall of yields on the market by approximately 5bps. The CNB is uncertain about the future economic development and considers risks as balanced. Now according the central bank’s prognosis, the rate stability in the short term and moderate increase of rates in the long term is the main scenario. We think the central bank will wait for the market reaction to the next ECB decision. But a postponement of any CNB action is the most probable scenario at present. Today t he market will watch the core markets. The market responded to the new CNB’s view on Friday and therefore no major changes is expected.

(CSOB - Investment research)