The Czech bonds tracked core markets
higher despite a weaker domestic currency
yesterday. The long end of the yield curve
dropped by around by 3 bps. Since German
Bunds continue to mover higher due to
violence in the Mideast Czech bonds might
extend their gains even today.
On the other hand, since the Czech currency
remains under pressure due to problems of
the Slovak koruna, domestic bonds at the
short-end of the curve might not necessary
move in the same direction as those at the
long end.
(CSOB - Investment research)