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2019/08/06 / Erste Group Research

Weekly Focus Poland

Calm week ahead in Poland, with no macro releases scheduled. Global markets to take time to digest last week’s FOMC decision and new duties on Chinese imports to US. Hence, we expect yields to remain around recent levels and zloty to remain on weaker side of 4.30 vs. EUR.

Bond market drivers: Polish 10Y yield followed core market. Ahead of the FOMC meeting last week, the Polish 10Y yield went up by 15bp to 2.25%. As an aftermath to the rate cut decision, the 10Y yield on Polish papers went back to 2.1%. However, there was barely any reaction to the surprisingly high inflation reading for July, which came in at 2.9% y/y. There are no local or global macro releases this week. Hence, markets should digest the FOMC decision and new duties on Chinese imports to the US. We expect the Polish 10Y yield to remain around recent levels.

FX market drivers: Zloty hit by trade disputes and higher inflation. Over the course of the week, the zloty weakened by 0.8% against the EUR. The EURPLN went up to close to a five-month low above 4.31. Apart from global factors, such as the disappointing FOMC decision and renewed trade dispute between US and China, local factors also put additional pressure on the zloty. We see the zloty as somewhat appreciating until the end of 3Q19, but the recent intensification in trade tensions could pose a risk to our forecast.

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General information

AuthorErste Group Research
Product nameCEE Country Update
Topic in focusFX, Macro/ Fixed income
Economy in focusPoland
Currency in focusPolish Zloty
Sector in focus-


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