Polish zloty, T-bonds gain as woes over geopolitics subside
August 12, 2014
The Polish zloty and T-bonds gained ground at the beginning of the week as the geopolitical situation showed signs of stabilization, with the 5Y benchmark yield declining to 2.81% on Monday and the zloty temporarily strengthening beyond 4.19/euro, according to financial market dealers.
"The market is calm on Monday: political concerns have faded away and the zloty temporarily went below 4.19/euro," mBank head of FC dealers Marcin Turkiewicz told PAP Polish news agency.
The market will now focus on domestic data, namely July inflation, "but one will have to continue to observe the geopolitical environment," the dealer said.
Poland's Central Statistical Office (GUS) will announce the July CPI reading on Wednesday, August 13. Analysts surveyed by PAP expect a 0.2% annual decline in consumer prices.
T-bonds stand chances of further strengthening after a good opening this week, PKO BP bond trader Maciej Popiel told PAP.
"Trade this week will be dictated by economic data; the market believes they will be weaker than expectations, supporting a lower interest rates environment," Popiel said. "Hence the possibility of further yield declines."
The strengthening visible early Monday morning came along with sentiment improvement and a rebound on the zloty market, Popiel also said.