The Czech bond market just partly tracked
the bullish move in core bond markets on
Friday afternoon as it closes earlier.
Interestingly, the Czech MinFin presented a
new financing strategy for the year 2007.
While the state plans to increase average
duration of the domestic debt, it also wants
to smooth its maturity profile. It implies that
the MinFin is ready to issue new 5Y, 10Y
and 15 benchmarks next year. At the same
time favourable financing conditions in
domestic market allow to leave the options
for foreign financing widely open, so the
Ministry’s plans suggest it can issue foreign
Eurobonds in a range between 0 to 80 CZK
bn.
Regarding today’s trading: given the empty
calendar the long end of the curve will
probably try to catch Friday’s positive action
on core markets. On the other hand, a drop
in yields at the short end of the curve can be
limited due to a weaker koruna.
(CSOB - Investment research)