Look for:

Products

Research Detail

2021/11/22 / Erste Group Research

Poland Weekly Focus | Market turmoil continues


Real economy data for October to show performance of economy at start of 4Q21. Industrial production surprised to upside, while retail sales should show solid dynamics. Market turmoil continues, with 10Y yield going up to 3.3% and zloty hitting 12-year low.

November 23 | Retail sales to remain solid. We expect retail sales to arrive at 11.9% y/y in October (5.0% y/y in real terms), slightly below the market consensus of 12.5% y/y. While labor market statistics remained solid in October, sentiment continued to deteriorate, affected by the worsening pandemic situation and surging inflation. Current consumer sentiment (BWUK) dropped for two consecutive months and stands at -23.3 in November, which is the lowest since February 2021. On the other hand, the low base from last year (due to restrictions) could be positive for the figure.

Bond market drivers | 10Y yield moved further up. Over the course of the week, the long end of the Polish curve increased by another 35bp to around 3.3%, which is the highest for more than three years. The 10Y German Bund moved in the opposite direction, as the yield dropped by around 10bp to -0.35%. As a result, the spread against the 10Y Bund widened significantly to 360bp, the highest since February 2017. On the other hand, the 2Y Polish yield fluctuated between 2.8% and 2.9%. Last week, the National Bank of Poland purchased Treasuries and state-guaranteed papers worth just PLN 0.4bn, the least since the launch of the QE program. This week on Thursday (November 25), the MinFin will hold the second switch auction scheduled for this week.

FX market drivers | Zloty hits 12-year low. The Polish zloty extended its losses and hit 4.72 vs. the EUR around noon on Monday, which is a 12-year low. Both global and local factors are behind the zloty’s weakness. Following the sharp move of the zloty on Friday, Governor Glapinski said that the recent weakening of the PLN is mainly due to the visible strengthening of the US dollar. He added that rising infection rates across Europe and in Poland could also be negative for the PLN. He added that if changes in the exchange rate are driven by market factors, it should not be expected that the central bank will intervene.While the governor’s comments had limited impact on the exchange rate, following the comment of PM Morawiecki on Monday, the EURPLN returned to 4.69.

PDF Download Download PDF (202kB)

General information

AuthorErste Group Research
Date2021/11/22
Languageen
Product nameCEE Country Update
Topic in focusMacro/ Fixed income
Economy in focusPoland
Currency in focusPolish Zloty
Sector in focus-
Download



Decline
Accept

We use cookies and web analysis software to give you the best possible experience on our website. If you consent, these tools will be used. For more details please read our Data protection policy.

INFORMATION FOR CORPORATE AND INSTITUTIONAL CLIENTS

Any information, material and services regarding financial instruments and securities provided by Erste Group Bank AG or any of its affiliates (collectively “Erste Group“) on this and any linked website hereafter (jointly the “Websites”) shall be exclusively to investors who are not subject to any legal sale or purchase restrictions (the “Interested Party“).

The publication and distribution of information as well as offering and selling of products and services described on the Websites is prohibited by law in some jurisdictions. For this reason, persons in countries in which the publication as well as the offering and selling of products and services described on the Websites are not permitted by law, must not enter the Websites and/or acquire the products displayed on the Websites.

Neither Erste Group nor any third party shall offer access to the Websites or offer the products to especially, but not limited to citizen/residents of the United States and “U.S. person” (as defined in Regulation S under the US Securities Act 1933 as amended), citizen/resident of Australia, Canada, Great Britain and Japan. For this reason, the distribution or redistribution of the information, materials and products into United States, Australia, Canada, Great Britain and Japan or into any other jurisdiction where it is not permitted under the applicable law, as well as to the citizens/residents of these countries shall be prohibited.

The securities displayed on the Websites have not been and will not be registered under the US Securities Act of 1933 and trading in the securities has not been approved for purposes of the US Commodities Exchange Act of 1936. For this reason the securities may, inter alia, not be offered, sold or delivered within the United States or, for the account and benefit of U.S. persons.

The Interested Party is solely responsible to examine, whether he may enter the Websites under the law applicable to it. Erste Group shall not be responsible for the distribution of content of any of the Websites to individuals or entities which provide false information about their right to enter the Websites. For this reason Erste Group shall not be liable for any legal claims or damages which may result from the unauthorized entering or reading of the Websites.

By agreeing to this hereto, the Interested Party confirms that
(i) It has read, understood and accepted this Information and the Disclaimer;
(ii) It informed itself about any possible legal restriction and warrants that it is not restricted or prohibited to enter the Websites according to any law applicable; and
(iii) It does not make available the contents of the Websites to any person who is not qualified by law to enter the Websites.
(iV) It is no consumer.