Oil prices rose again to about $110 per barrel
The Ministry of Finance announced that the period for applying reduced VAT and excise rates on gasoline and diesel has been extended from April 30 to May 15, 2026. This information aligns with our scenario assuming lower tax rates at least until the end of June.
The Monday session in the USA ended with gains in major indices, setting a new record for the S&P 500. Investors, for now, are not reacting to the lack of significant progress in peace talks between the USA and Iran, although oil prices rose again to about $110 per barrel. Base market yields are slightly above yesterday’s close, which could help weaken the national debt.
In today’s tender, the finance ministry will offer 5–10 bn PLN. Some impact on the market may come from information about the draft report on the implementation of the medium-term budgetary-structural plan and the multi-year macroeconomic assumptions, which will be discussed at today’s Council of Ministers meeting.
At today’s opening, the EUR/PLN rate was close to yesterday’s close after a temporary evening strengthening.
Meanwhile, the EUR/USD rate is slightly lower near 1.1715 with a slight decline toward 1.167. A weaker Conference Board consumer confidence index could slightly weaken the dollar by the end of the day.
Today rates remain unchanged, likely keeping the Hungarian central bank steady. The Bank of Japan kept rates unchanged, and the message was relatively hawkish, leaving the door open for a hike in June.
Polish indices down, zloty falling
Yesterday’s session saw Polish equity indices fall by about 0–0.8%. The zloty slightly lost value against the euro to about 4.248 from about 4.241, indicating marginal moves. This was accompanied by a slight strengthening of the euro against the dollar.
On the domestic interest rate market, yields rose by about 3–4 bp before today’s planned bond auction. This was also aided by rising bond yields. By the end of the day, the 10‑year bond yield was about 5.64%.
According to records in the Court and Economic Monitor, members of the RPP H. Wnorowski and J. Tyrowicz opposed a 25‑bp cut in NBP rates at the RPP meeting in March. This indicates a gradually decreasing willingness to reduce NBP rates.
State assets minister W. Balczun also said yesterday that the CPN program for lower fuel prices will be maintained as long as the international situation does not calm down.
According to the regulation of the Minister of Finance and Economy, the period for reduced VAT and excise rates on gasoline and diesel has been extended from April 30 to May 15, 2026.
Lower inflation and higher fiscal risk support rising credit spreads
This means a lower inflation path with higher fiscal costs, which may drive higher credit spreads on asset swaps with relatively lower FRA and IRS rates.
BGK announced that at the April 29 tender, as part of the issuance for the COVID‑19 Countermeasures Fund, it will offer securities of series FPC0229, FPC0231, FPC0332, and FPC0235, with a minimum supply of 500 bn PLN.
On European exchanges, equity indices rose. Some optimism appeared in markets after efforts were made to resume talks between the USA and Iran following reports that Iran submitted a proposal to the USA regarding the reopening of the Strait of Hormuz. The plan involves extending the ceasefire so that parties can work toward a lasting end to the fighting, and negotiations on Iran’s nuclear program are to be undertaken later, after the USA lifts the Strait of Hormuz blockade.
European Commission President Ursula von der Leyen said it is too early to lift sanctions imposed on Iran. In currency markets, the euro remained relatively stable against the dollar with a slight upward trend to about 1.175 from around 1.172, but in the afternoon there was a downward correction to about 1.172 with no significant data releases.
On base debt markets, there was relative stability with a slight tendency for yields to rise at the end of the session. By the end of the day, U.S. 10‑year bond yields were about 4.34% and German yields about 3.02%.
