Czech bonds firmed in lively trading at the end of last week inspired by European bonds, though the spread between Czech 10Y bond s yields and yields of 10Y Bunds widened from 8 to 10 bps.
The market now n ervously awaits Thursday’s CNB Bank Board meeting as last minute hawkish call from board member Erbenova intensified rate hike expectations, though a 25 bps rate hike is far from certain in our view. Nevertheless, fears of a rate hike will probably not allow the domestic bonds to gain this week even though core bond markets might move in a positive territory these days.
(CSOB - Investment research)