In a few weeks the whole Polish forward rate curve collapsed by 100bps. We now price in first rate hikes in Q1 of 2015 (compared to Q3 of 2014 expected month ago). ECB did cut rates unexpectedly, which obviously caused even more bullish sentiment here in Poland. We had a very good auction (3bln of OK0116 and 4bln of PS0718 sold) but keep in mind that almost full demand for 5 year bonds was filled (that shows MinFin’s determination in keeping duration as long as possible) which should keep the curve steep for now.
