The Czech money market interest rates and yields on the short end of the curve went up quite dramatically (7 bps)

The Czech money market interest rates and yields on the short end of the curve went up quite dramatically (7 bps). That was mainly due to additional hawkish comments made by the CNB’s vice governor Singer. Singer is nevertheless well known activist and was always willing to hike or cut rates earlier than other members of the board.

That is why we believe, finally the opinion of the central bank’s governor Tuma should be decisive. Hence we still bet on the stability of the rates after the CNB’s meeting next week. Today we do not expect any significant impetus for trading from domestic scene. The yields and interest rates at the short end of the curve do not have much space for rising further. On the other hand the yields of the longer maturities could increase a bit as tracking the development of German bund.

(CSOB - Investment research)