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2018/09/24 / Erste Group Research

Weekly Focus Poland

According to Ministry of Labor the unemployment rate should marginally drop in August to 5.8% surprising market to the downside. The local macro releases should not have any impact on the bond and FX market. However, this week’s FED rate hike decision and rate outlook for 2019 is likely to be the main factor influencing the zloty and yields in Poland.

September 25: Unemployment to drop further according to Ministry of Labor. According to the Ministry of Labor unemployment rate should drop to 5.8% in August as opposed to our initial expectations of -increase to 6.0% y/y in August and market consensus at 5.9%. Recently, we have observed signs of stabilization on the labor market with wage growth increasing by 6.8% y/y and employment rising 3.4% y/y in August.

Bond market drivers: Industrial production data influenced the 10Y yields. Over the week, the 10Y yields moved between 3.22% and 3.18%.
Although, the industrial production data arrived in line with market
expectations we have observed a decrease of 10Y yields to below 3.18%.
Other macro releases did not have any impact on the bond market. The
spread vs. 10Y German Bund narrowed to below 270bp during the week,
before moving towards 280bp at the end of the week. Currently, the
spread stands at the 1Y average level. This week global events will most
likely influence the long-term yields in Poland. The rate hike in U.S by
0.25bps is broadly expected, yet more importantly the new rate outlook
will be published as well. The FED’s rhetoric about future path of interest
rate in US is likely to be crucial for the markets and any hawkish
comments -may bring the yields up in Poland.

FX market drivers: EURPLN remains under global sentiment. The zloty showed some movements over the week against the EUR. The
EURPLN went below 4.29 at the beginning of the week supported by
weaker US dollar and moved toward 4.31 at the end of the week, driven
by global sentiment. Last week local releases did not have any impact on
the EURPLN and the zloty keeps to be driven by the global risk appetite.
In our view, the expected rate hike in the US is already priced-in by the
market but the more hawkish comments regarding the outlook for 2019
might be zloty negative.

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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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