Headlines
Fixed Income: Czech issuance calendar implies the issuance of Eurobond
Czech Republic
Even as the rest of the eastern European markets, such as Hungary or Romania, experience an active trading, the Czech currency market is further dominated by the holiday sentiment. This cannot even be unlocked by the comments of domestic central bankers. The EUR/CZK currency pair thus continues to wander in a tight zone close to the EUR/CZK 24.80 level and this range-trading might prevail even today.
Contrary to the Czech forex market the activity on the bond market is more visible. The main event of the day was the 3,40%/2015 bond auction which attracted solid demand. It exceeded the offered amount of CZK 7 bln 2.5 times. The Ministry of Finance at the end issued bonds for CZK 7,337 bln, out of which it kept some 500 ml on its books. The average return was 2,592%. For the comparison, at the previous round for the same bond on 17.07.2010 demand exceeded supply 2.25 times and the achieved return was equal to 3,001%.
The Ministry of Finance has published the issuance plan for bonds and treasury bills for the last quarter of the year 2010. According to this, five auctions will take place for an amount of bonds worth CZK 30 bln. The shortest duration will be 3 years and the longest 15 years. Aside of the bonds, the Treasury will issue bills for CZK 25 bln. However, the thin issuance plan calls for further questions. The MinFin argues that its issuance target for this year is CZK 280bn, while the implied domestic issuance will be around CZK 175 bn. Hence, it is quite likely that the gab will be filled by the issuance of Eurobonds which has been confirmed by MinFin officials in today’s newspapers.
| Currencies | change | |
| EUR/CZK | 24.71 | -0.10% |
| EUR/HUF | 284.4 | -0.70% |
| EUR/PLN | 3.971 | -0.40% |
| USD/PLN | 3.1 | -1.20% |
| EUR/USD | 1.279 | 0.60% |
| USD/JPY | 84.2 | -0.30% |
| Bonds 2Y | change | |
| Czech Rep. | 1.8 | -0.02 |
| Hungary 3Y | 7.33 | -0.18 |
| Poland | 4.72 | 0.05 |
| Slovakia | 1.74 | 0.02 |
| Eurozone | 0.61 | 0.01 |
| USA | 0.51 | 0.01 |
| Bonds 10Y | change | |
| Czech Rep. | 3.3 | -0.08 |
| Hungary | 7.52 | -0.25 |
| Poland | 5.44 | 0.01 |
| Slovakia | 3.68 | -0.01 |
| Eurozone | 2.21 | 0.08 |
| USA | 2.57 | 0.06 |
Poland
Similarly to the Czech koruna, the zloty has benefited from the huge gains on global equity markets and jumped up to the EUR/PLN 3.97. The polish currency was not affected by the comments of the central banker Elizabeth Chojne Duch who does not see any reason for a quick change in the interest rate level.
Today, there are no significant events on the domestic scene. The attention will be mainly on the global sentiment, which will be largely affected by the tomorrow’s US payrolls release.
