Yesterday’s construction output had no
impact on Czech bonds. Nevertheless,
trading volumes were higher supported also
by the auction of 2.55/2010 paper. The
influence of core markets sent also Czech
yields higher. S&P agency’s warning on the
country’s positive outlook (A- rating) also
added to the drop in bond prices.
On Wednesday the Ministry of finance
offered CZK 6 bn. Worth of the 2.55/2010
bond in an auction, but sold 5.1 bn with an
average yield of 3.517% only. Dealers totally
ignored second rounds; they could get the
same paper cheaper on the secondary
market.
Today’s current account has usually only a
limited impact. We expect a lower deficit
than a month ago.
The most important data are due tomorrow;
GDP, industrial production and inflation are
key events of the month. However, till Friday
we expect bonds to follow core market’s
movement.
(CSOB - Investment research)