The Czech bonds closed virtually
unchanged, although the intra-day
development at the long end of the curve
was not so boring. The long yields,
nevertheless just followed the core bond
markets. It’s worth adding that the market
completely shrugged the information that
according to new data from the CSO, the
general budget deficit for 2005 was 3.6% of
GDP (on ESA95 basis) and not the originally
announced 2.6%. The reason for the
revision is that Finance Ministry’s data on
tax revenue and investments were made
more accurate.
Today, the market will (as usual) follow the
euro bond market, which will be awaiting the
ECB interest rate decision and press
conference scheduled for Thursday.
Moreover, tomorrow there is the last auction
of a 10Y government benchmark, which also
slows the activity down. The auction should
meet heavy demand while many domestic
market participants have already establish
short positions and they are ready to go long
on the primary market. As concern the
politics, we expect an outcome of the
confidence vote will be known either this
evening or tomorrow, so it will not affect
today’s trading.
(CSOB - Investment research)