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Polish Finance ministry plans no long−dated auction until September

Mon, Jun 29 2009, 08:30 GMT
by KBC Market Research Desk

KBC Bank


Headlines

Currencies: CEE currencies in wait and see mode ahead of heavy US calendar
Fixed Income: Polish Finance ministry plans no long-dated auction until September


Czech Republic

On Friday, the Czech koruna gave up part of its gains, which was triggered by CNB’s decision to leave rates unchanged on Thursday. Hence, the EUR/CZK pair moved back above the 26.0 level.

This week the domestic calendar is completely empty, so the koruna will to watch at foreign markets, where the calendar is very well packed (though not today). Tomorrow, euro zone CPI is forecasted to fall into negative territory (-0.2% Y/Y), but the risks might be on the upside of expectations after the German and Spanish inflation data. In the US, the manufacturing ISM is forecasted to show the sixth consecutive improvement in June. And last but not least this month, the payrolls are scheduled for release on Thursday instead of Friday due to the long July 4th weekend.

The Czech yield curve flattened as the CNB decision continued to weight on the front end of the curve, while the long end of Czech curve tracked partly benefited from better sentiment in core bond markets. This week the domestic calendar is completely empty, hence the Czech bond curve will behave mostly according to the German curve, while the front end will watch the koruna movements.

CurrenciesClosechange
EUR/CZK26.070.4%
EUR/HUF276.90.3%
EUR/PLN4.5120.3%
USD/PLN3.196-0.4%
EUR/USD1.400-0.2%
USD/JPY95.2-0.7%

Bonds 2YClose change
Czech Rep.2.940.03
Hungary 3Y10.19-0.03
Poland5.350.05
Slovakia2.740.13
Eurozone1.340.01
USA1.11-0.02

Bonds 10YClose change
Czech Rep.5.890.04
Hungary10.22-0.07
Poland6.44-0.01
Slovakia5.400.45
Eurozone3.39-0.04
USA3.53-0.05


Poland

The Polish currency failed to get below 4.50 EUR/PLN on Friday. The zloty ignored the announcement that the finance ministry does not plan to issue long dated bonds in the next two months. Otherwise the session was rather calm with slightly below average volumes.

This week is nearly empty concerning domestic issues. The zloty seems to have a lot of problems with getting below 4.50 EUR/PLN. Furthermore if the appetite for risk deteriorates, we may see some weakness on the Polish market in the week ahead.

Published on  Mon, Jun 29 2009, 08:40 GMT


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http://www.kbc.be/dealingroom | piet.lammens@kbc.be

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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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