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2020/04/27 / Erste Group Research

Poland Weekly Focus | Central bank to buy bonds

No local macro releases scheduled this week. Central bank to hold second bond auction in April. Volume could reach PLN 20-30bn. Flash estimate of 1Q20 GDP growth in US and Eurozone to be in focus.

April 29 | NBP to buy bonds. The National Bank of Poland is scheduled to buy bonds within their QE program. So far, the NBP has bought almost PLN 50bn in bonds on the secondary market, mostly in papers maturing in 2025 and 2029. During last auction central bank bought PLN 30bn.

Bond market drivers | Long end of curve dropped further. The low-yield environment continues in Poland. Over the course of the week, the 10Y LCY yield went further down and dropped towards 1.35%, following core market developments. With the 10Y Bund dropping by 5bp to below -0.5%, the 10Y LCY tested the 1.3% level in the middle of the week. As a result, the spread vs. the 10Y Bund went down to 170bp, but recovered in the second half of the week and moved towards 180bp. This week, NBP operations on the secondary market will likely be in focus.

FX market drivers | EURPLN fluctuates around 4.53. The zloty remains locked around recent levels of 4.53 vs. the EUR. Releases of real economy data for March did not influence the zloty. Global factors continue to drive the exchange rate and we see the EURPLN remaining around 4.52 until the end of 2Q20. This week, in both the Eurozone and US, the central bank committees will meet and decide on monetary policy. However, for the EURUSD, the flash estimates of 1Q GDP growth in the US and Eurozone may turn out to be more important.

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General information

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


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