Headlines
Currencies: CE currencies eye US payrolls report
Fixed Income: Czech bond yields at all time lows
Czech Republic
The holiday season mood still prevailed in the Czech forex market as the EUR/CZK pair hovered around the 24.75 level yesterday. There were no domestic events, which could bring a stronger price action (driven by domestic impulses).
On the other hand, the Czech fixed-income continued to rally as it digested yesterday’s release of the thin issuance calendar for the last quarter and the fact that there will be a eurobond issue in the last quarter of the year. As a result the yield of the 10Y benchmark dipped to a fresh all-time low (just below 3.3%).
Today, all eyes will be on the upcoming US payrolls report released this afternoon. Still, the price action could be more limited, because the Czech markets close relatively soon after the US release.
| Currencies | change | |
| EUR/CZK | 24.73 | 0.1% |
| EUR/HUF | 284.5 | 0.0% |
| EUR/PLN | 3.960 | -0.3% |
| USD/PLN | 3.088 | -0.4% |
| EUR/USD | 1.282 | 0.2% |
| USD/JPY | 84.3 | 0.1% |
| Bonds 2Y | change | |
| Czech Rep. | 1.70 | -0.10 |
| Hungary 3Y | 7.32 | -0.01 |
| Poland | 4.76 | 0.04 |
| Slovakia | 1.75 | 0.02 |
| Eurozone | 0.61 | 0.00 |
| USA | 0.50 | 0.00 |
| Bonds 10Y | change | |
| Czech Rep. | 3.30 | 0.00 |
| Hungary | 7.52 | 0.00 |
| Poland | 5.52 | 0.08 |
| Slovakia | 3.76 | 0.08 |
| Eurozone | 2.28 | 0.06 |
| USA | 2.62 | 0.05 |
Poland
The Polish zloty kept the gains triggered earlier this week by the surprisingly good manufacturing ISM. The pair traded near 3.95 EUR/PLN for most of the session without any significant domestic impetus. The news that Polish treasury minister plans to raise 15 billion zlotys through the privatisation of state companies in 2011 was widely ignored. On one hand it is comfortable for the markets to see that immediate funding needs are well covered for the year ahead. On the other hand Poles have very low fiscal discipline. With growth around 3% the country is still posting deficits approaching 7% of GDP for the second year in a row. Hence, covering financing needs through the sale of government property is a very short lived strategy.
Today the domestic scene is empty and all eyes should be on the US payrolls. We do not believe this figure has potential to push the pair further in a southern direction.
