Czech bonds opened slightly lower on Thursday and went losing. Even when the Czech state budget deficit was better, it had no impact on the market. Then the bonds followed the development in euro zone. However, since the Czech market earlier close the bonds could not copy the euro zone later correction and experienced greater loses. On Thursday t he issuance calendar for the third quarter was released. The ministry of finance will issue bonds for CZK 25 bil. and treasury bills for CZK 41 bil. We remind that the ministry may issue bonds for CZK 150 bil. and bills for CZK 148 bil. this year. Negative spread between Czech bond and Bund (10Y) yields disappears.
The minutes from the CNB meeting are released today. However, the decision to hold rates unchanged was unanimous and the governor’s press conference reveal main ideas from the meeting. Therefore it should give no surprise and the market should concentrate on euro zone markets. However, the Czech parliamentary elections take place this afternoon so this could bring some noise to the usually quiet domestic market ahead of the weekend..
(CSOB - Investment research)