Headlines
Currencies: Polish markets eye retail figures
Czech Republic
The Czech koruna experienced another boring session as the EUR/CZK pair continued to hover around the 25.80 level. Hence, the market almost completely shrugged off the news of a successful auction of the 10Y government benchmark and the new pessimistic projection of the Finance Ministry. Recall that the ministry said in an analysis yesterday that the economy has not hit the bottom but might be approaching the bottom. The ministry’s new GDP forecast calls for negative growth this year of 4.3% (we expect -3.0%), while it sees only slightly positive growth next year.
Today, the domestic calendar is once again empty. Markets will continue to watch global equity market and other CE currencies – particularly the zloty. Technically, the next support level for the EUR/CZK pair stands at the 26.65.
| Currencies | change | |
| EUR/CZK | 25.71 | -0.40% |
| EUR/HUF | 271.2 | -0.20% |
| EUR/PLN | 4.243 | -0.60% |
| USD/PLN | 2.981 | -1.20% |
| EUR/USD | 1.424 | 0.30% |
| USD/JPY | 94.1 | 0.40% |
| Bonds 2Y | change | |
| Czech Rep. | 2.82 | 0.03 |
| Hungary 3Y | 8.99 | -0.03 |
| Poland | 5.04 | -0.02 |
| Slovakia | 2.54 | 0.02 |
| Eurozone | 1.28 | 0.03 |
| USA | 0.95 | 0.02 |
| Bonds 10Y | Change | |
| Czech Rep. | 5.79 | -0.03 |
| Hungary | 8.75 | -0.04 |
| Poland | 6.19 | 0 |
| Slovakia | 5.18 | 0.04 |
| Eurozone | 3.42 | 0.05 |
| USA | 3.55 | 0.06 |
Hungary
Yesterday, the EUR/HUF currency pair again kept a sideways trading pattern in the 271/273 range. There was no domestic eco news to guide the price action and also global (stock) markets were not able to give any clear guidance.
In an interview, the Finance Minister was quoted that, even after the successful 1 billion euro eurobond last week, it is not the aim to raise the share of foreign currency debt within the state debt. In the short-term the Finance Minster indicated the intention the increase forint denominated issues.
On the currency markets, the underlying sentiment remains forint constructive. Today, sentiment on global markets will again be the decisive factor for forint trading. Tomorrow markets will look out for the retail trade data.
Poland
The Polish zloty went through another calm session and did not get too far from 4.24 EUR/PLN. There was a slightly positive bias on the market despite rather cautious sentiment on the global equity markets The Polish finance ministry said that if the conditions remain favourable it may issue Swiss franc, yen or euro-denominated bonds in the upcoming months.
Today the main attraction is retail sales figure. Despite poor labour market conditions in the previous months, the figure came out better than expected at 2.2% M/M and 0.9% Y/Y. However, as the retail sales release is a nominal figure, it may be positively affected by the effect of rising prices in some areas of the economy (e.g. rising fuel prices). The immediate market reaction on the release is limited. If positive sentiment on the global equity markets prevails, the zloty might go for a retest of the key EUR/PLN 4.21 support/resistance area.
