KBC: Polish PMI surprised to the upside
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| 10:41 |
Central European currencies saw a mixed session on Tuesday. Despite posting some gains in intraday trading, they closed barely changed as the strengthening US dollar weighed in late afternoon. However, the Polish zloty kept the gains and even tested 200 days moving average (4.2196) as the state-owned BGK bank sold euros in the afternoon.
The move further supported the zloty, which has gained more than 5 percent thus far this year (see the chart). Apart from that, the result of inflation expectations survey of the NBP unveiled that Polish households expected the average CPI inflation over next 12 months to reach 5.2 percent (i.e., by 0.4 percentage point higher reading than showed in December’s survey). Let us remind that the NBP takes the respective number into considerations while setting interest rates. As a result, market further cut its bets on a decrease of the reference rate in 9 months horizon - the spread between FRA 9x12 and 3M WIBOR is currently seen only at 5 bps.
Generally, regional assets experienced a successful beginning of 2012. Both forint and zloty strengthened by more than 5 percent and bonds yields edged lower. Relatively positive global mood should support today’s debt auctions in the Czech Republic and Poland. The Czechs are selling CZK 5 - 8 bln. of 3yr bonds and Poland’s FinMin offers PLN 1 - 3 bln. of 10yr bonds. We expect both auctions to be well-subscribed. Poland’s auction might be further supported by recent comments of FinMin official who said earlier this week that the country had covered about a third of this year’s borrowing needs at the end of January. Regarding the fresh figures on regional PMI’s for January, the biggest surprise came from Poland. HSBC PMI index surged to 52.15 points (vs. expected 49.2) mainly due to rising new orders. Clearly, such a result should further support rising hawkish mood among Polish central bankers.
KBC
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