KBC Market Research Desk
KBC Bank
Ambiguous data from the Polish labour market (a slower wage growth but, at the same time, a faster employment growth than expected) got little attention yesterday compared to a speech by the new Polish PM in which Beata Szydlo sketched out some principles of new government’s economic programme.
On the fiscal side, Ms. Szydlo affirmed government´s intention to strengthen support for families with children and to lower the retirement age (the reforms should be financed by better tax collection and imposition of sector taxes). A novelty, on the other hand, was the idea of introduction - in cooperation with the National Bank of Poland – of monetary measures that would resemble ECB’s TLTRO, i.e. long-term repo operations facilitating access to credits for enterprises. Let us recall that the new government will appoint a majority of Monetary Policy Council (MPC) members early next year (incl. the NBP president, whose tenure expires in June), which can make the future MPC more receptive to government´s intentions than the current one.
In our view, the usefulness of “Polish TLTRO” is moot as official rates are at an alltime low and the credit growth has already gathered pace in recent months. However, if it was introduced, it could have a negative effect on the zloty. Hence we do not need to change our scenario and continue to bet on a slight depreciation of the zloty in 2016Q1.
| Currencies | % chng | |
| EUR/CZK | 27.02 | -0.1 |
| EUR/HUF | 310.1 | -0.2 |
| EUR/PLN | 4.24 | 0.0 |
| EUR/USD | 1.07 | 0.2 |
| EUR/CHF | 1.09 | 0.7 |
| FRA 3x6 | % | bps chng |
| CZK | 0.24 | -1 |
| HUF | 1.33 | 2 |
| PLN | 1.63 | 1 |
| EUR | -0.16 | 1 |
| GB | % | bps chng |
| Czech Rep. 10Y | 0.51 | -1 |
| Hungary 10Y | 3.43 | 0 |
| Poland 10Y | 2.77 | 2 |
| Slovakia 10Y | 0.80 | -3 |
| CDS 5Y | % | bps chng |
| Czech Rep. | 51 | 0 |
| Hungary | 159 | -1 |
| Poland | 73 | 0 |
| Slovakia | 51 | 0 |
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
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