The zloty holds firm at EUR-PLN 4.33
In the background, however, we observe the continued escalation of the conflict in the Middle East, ongoing strong rises in oil prices, and simultaneous intensification of bets that the Fed will raise rates already in July.
As a result, EUR-USD fell yesterday below 1.14 and broke out of the stubborn up‑trend channel built since the end of June. Will the zloty’s resilience return?
Yesterday, EUR-PLN stabilized around 4.33 despite an adverse environment of heightened risk aversion in markets and a stronger dollar.
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The zloty this week shows greater resilience, which is likely largely due to a reversal of bets on NBP rate cuts.
There is growing conviction in the market that in the current environment (return of high energy commodity prices) the RPP will tighten its stance on monetary policy.
The domestic debt market remains under pressure. The ongoing oil shock continues to exert pressure on domestic benchmark yields. These weakened yesterday by 13‑16 basis points. 10‑year yields yesterday exceeded 5.8%, and 2‑year yields 4.5%, and are at their highest since mid‑June.
Today before noon, preliminary estimates of July PMI for France, Germany, and the entire euro zone will be released. Consensus expects industrial PMI to rise to 51.5 points from 51.4 previously, and services PMI to 49.8 points from 49.4 previously.
At 15:45, the PMI index for the U.S. services sector for July will be published. Consensus expects the index to rise to 51.5 points from 51.2 previously.
At 15:45, the PMI index for U.S. manufacturing for July will also be published. Consensus expects the index to rise to 54.4 points from 53.9 previously.
At 16:00, data on U.S. new home sales for June will be released. Consensus expects sales to rise in annualized terms to 606,000 from 580,000 previously.
