The MinFin is tomorrow scheduled to auction CZK5.0bn of seven-year bonds, CZK5.0bn of 12y bonds and CZK3.0bn of 15y bonds. The CZGB 2.50% Aug-28 and CZGB 2.00% Oct-33 return to auction after a six-month pause. Both bonds have room for further issuance of around CZK20bn each in the coming months. On the other hand, the CZGB 4.20% Dec-36 is likely to see its last auction tomorrow. We expect a market to decide between very low supply over the last three months and very expensive pricing in ASW terms. Asset spreads are multi-year tights for most bonds. On the supply side, according to our calculations, the government has covered around 80% of all borrowing needs for 2021. We expect supply to increase over the next two months, which should bring some relief to asset spreads. On the demand side, we expect further strong investor interest given the meagre supply of recent months. However, overall, we do not expect a significant change in the CZGB story until the first quarter. 

Issuance activity: The MinFin is tomorrow scheduled to auction CZK5.0bn of seven-year bonds, CZK5.0bn of 12y bonds and CZK3.0bn of 15y bonds. The CZGB 2.50% Aug-28 and CZGB 2.00% Oct-33 return to auction after a six-month pause. Both bonds have room for further issuance of around CZK20bn each in the coming months. On the other hand, the CZGB 4.20% Dec-36 is likely to see its last auction tomorrow. We expect a market to decide between very low supply over the last three months and very expensive pricing in ASW terms. Asset spreads are multi-year tights for most bonds. On the supply side, according to our calculations, the government has covered around 80% of all borrowing needs for 2021. We expect supply to increase over the next two months, which should bring some relief to asset spreads. On the demand side, we expect further strong investor interest given the meagre supply of recent months. However, overall, we do not expect a significant change in the CZGB story until the first quarter.

Market situation: After yesterday's inflation number (4.9%, three-tenths above expectations), the IRS curve has again risen significantly, by 15-20bp at the short end and 10bp at the long end. The degree of inversion of the curve has reached record levels this year. CZGB yields are catching up with the IRS move, resulting in further richening in ASW terms.  

Rates outlook: As has become customary, the latest inflation numbers are changing the monetary policy narrative. We now expect a 50bp hike in November, but a 75bp move will very likely be on the table again. On the other hand, recently announced production cutbacks in the automotive sector due to chip shortages and rising energy prices are likely to lower the outlook for the next quarters.

Moneta Money Bank announced today that the CNB has approved a dividend of CZK3.0 per share (a total amount of CZK1,533m) from earnings for 2019 and 2020. This means a gross yield of 3.4%.

Moneta's management will propose a dividend of CZK3.0 to shareholders for approval at an extraordinary general meeting, which should be convened at the beginning of November.

Moneta Money Bank announced today that the CNB has approved a dividend of CZK3.0 per share (a total amount of CZK1,533m) from earnings for 2019 and 2020. This means a gross yield of 3.4%.

Moneta's management will propose a dividend of CZK3.0 to shareholders for approval at an extraordinary general meeting, which should be convened at the beginning of November.

The CNB has also lifted restrictions on the payment of dividends and expects banks to make further dividends after the publication of results for the full year 2021.