Czech fixed income markets tracked positive yesterday

Czech fixed income markets tracked positive developments in the core bond markets and in the domestic forex markets and yields (rates) dropped along the whole yield curve. Moreover, the Czech MinFin successfully placed its 2Y benchmark in the primary market as the average accepted yield was 10 bps lower than in the previous auction fourteen days ago.

It is worth to add that the market completely shrugged off the information that the central government budget fell into red as it recorded a CZK 12.7 bn deficit in the Jan-Oct period after CZK 1.5 bn surplus in the previous month. Today the domestic economic calendar is empty, thus the developments in eurozone, specifically the ECB meeting and comments of ECB president Trichet will be decisive for the Czech FI market.

(CSOB - Investment research)