Macro, FX & Rates: Zloty watches S&P rating review
(PL) The zloty hit yet another five-month low on Thursday despite the fact that inflation has risen to zero earlier this week and PMI for November came out stronger than expected. The zloty is therefore seen at the weakest levels since the aftermath of the Brexit when it shortly breached EURPLN 4.50 level. Polish government bonds fell too and 10-year yield hit a 2-1/2 year high.
Today, the zloty may test this level again. Apart from US nonfarm payrolls report (which may be negative for US treasuries and hence for the zloty), a revision of Polish rating - or fears of possible downgrade - by S&P may undermine the zloty further.
(CZ) Revision of GDP figures for the third quarter of 2016 brought about no significant surprises. The growth remained at 1.9% Y/Y and in quarter-on-quarter terms it was revised down from 0.3% to 0.2%. Still, even the revised figures confirm marked slowdown of economic growth in the third quarter which was mainly caused by quarter-on-quarter decline exports. On the contrary, domestic demand, both for investment and consumption, increased.
As for the fourth quarter, we expect economic growth at about 2%. This would mean full year growth around 2.5%. For 2017 we expect economic growth around 2.5% as well but the structure may differ as growth could be driven more by investment.
| LAST | PREVIOUS | CHANGE (%) | |
| EURCZK | 27.06 | 27.05 | 0.06 |
| EURHUF | 314.5 | 314.2 | 0.07 |
| EURPLN | 4.491 | 4.472 | 0.41 |
| LAST | PREVIOUS | CHANGE (bps) | |
| CZGB 10Y | 0.532 | 0.532 | 0.0 |
| HUGB 10Y | 3.41 | 3.41 | 0.0 |
| PLGB 10Y | 3.77 | 3.77 | 0.0 |
| LAST | PREVIOUS | CHANGE (%) | |
| PX | 885.1 | 885.1 | 0.00 |
| BUX | 29998 | 29998 | 0.00 |
| WIG | 48404 | 48404 | 0.00 |
Author
KBC Market Research Desk
KBC Bank
