The Czech bond market experienced
uneventful session, as trading was rather
soft yesterday. While the medium and long
segment of the yield curve closed practically
unchanged, more action was seen on the
money market. The weaker koruna once
again pushed money markets rates slightly
higher.
We expect the bearish flattening will
continue, if the negative sentiment on the
domestic FX markets persists in coming
days. Recall that CNB Board members have
just three more days to make their comment
ahead of the upcoming interest-rate setting
meeting. From this point of view, unless we
hear any hawkish comments till Thursday
evening, the short end of the yield curve will
correct lower.
(CSOB - Investment research)