The Czech bonds stayed put in a holiday
quiet trading session. No domestic statistics
were released and investors did not want to
change their position before today’s CNB
meeting and the bonds followed the
movement on euro zone markets. However,
the Czech market was closed sooner than
its western counterparts and therefore
domestic bonds were not able to strengthen
late in the day.
Today’s CNB meeting is the most important
event of the week. While we do not expect
any rate change, the subsequent press
conference might highlight CNB’s opinion on
FX developments and deficit state budget.
At the same time we do not suppose the
current government proposal to increase
price of electricity and tobacco tax in 2007
could influence the CNB inflation projection
and have impact on the bond market.
Nevertheless, the ECB meeting with
Mr.Trichet’s comments and euro zone bond
market movement may be important for the
Czech market as well.
(CSOB - Investment research)