Following the Polish Monetary Policy Council’s (RPP) entirely unexpected decision a month ago to slash its benchmark interest rate by 0.75 p.p., the Polish currency significantly weakened. The EUR/PLN rate jumped within a week from a level below 4.5 PLN to nearly 4.7 PLN. The Monetary Policy Council’s decision yesterday – to reduce the reference rate from 6 percent to 5.75 percent – was in line with average expectations (although the spread of economists’ individual forecasts was very large), and the market reaction was much more subdued. This time, the Polish currency strengthened. Yesterday, the EUR/PLN rate dropped by 0.49 percent, and today as of 9:55 a.m. lost another 0.32 percent. The futures market now expects further declines in short-term interest rates in Poland by almost 0.5 percent by the end of the year.
A press conference by the President of the National Bank of Poland (NBP) will begin today at 3 p.m.
The yield on 10-year Polish government bonds increased yesterday and this morning, reaching its highest level since mid-June (5.98 percent).
On the Warsaw Stock Exchange, the WIG-20 index started Wednesday’s session at its lowest level since April, but ultimately ended the day with a rise of 0.81 percent. Today at around 10:05 a.m., this recovery was continued (+0.33 percent). The share price of Pepco Group NV reached its historical low once again. Among the mWIG40 and sWIG80 components, Grenevia (formerly FAMUR) and Grodno shares reached new cyclical lows.
Yesterday, weaker than forecast ADP data (the U.S. non-farm private sector added only 89,000 jobs in September, the fewest since January 2021) translated into a drop in the yields on 10-year U.S. treasury bonds from the highest level since 2007 (4.74 percent this morning).
The EUR/USD rate stabilized this morning (0.05 percent) following yesterday’s rise. The USD/JPY rate, which dropped sharply on Tuesday after exceeding the level of 150 JPY for the first time in a year, triggering speculations about a possible central bank or finance ministry intervention, stayed slightly below the 149 JPY level.
The Bitcoin to U.S. dollar rate’s attempt on Monday to breach the 28000 USD level was rebuffed, with the BTC/USD rate slightly down 0.29 percent as of around 10:25 a.m. today.
Crude oil contract prices sharply dropped to a month-low yesterday (WTI -5.61 percent, Brent -5.62 percent). This was explained by anticipated demand decline due to the continued global economic slowdown. In contrast, the price of natural gas contracts on the NYMEX reached their highest level since January.
