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Bond Volatility Remains Low Despite Rising Inflation

CZECHIA
  • Unlike Poland and Hungary, volatility in the Czech bond market has remained low in the past two months despite the rise in inflationary pressures globally.
  • Czech 10Y yield peaked at 1.98% in March and has been gradually retracing lower in the past two months, breaking below an important support in the past week at 1.69%, which represents the 38.2% Fibo retracement of the 1.24%- 1.98% range and the 100D SMA.
  • Czech currently offers one of the lowest 10Y real yields among the EM world at -1.42%.
  • Next CPI print (for May) is coming out on June 10; the market is currently expecting inflation to rise slightly by 0.1ppt to 3.2%.

Source: Bloomberg/MNI

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