Blue fuel is currently twice as expensive in Europe as at the beginning of the year. The rise in commodity prices reignites inflationary concerns and expectations for a more hawkish monetary policy worldwide. Yesterday’s ECB conference did not provide arguments against these expectations. Consequently, a global debt sell‑off is occurring. The yield on the U.S. 10‑year Treasury is stabilizing in the morning around 4.70%, the highest since January 2025.
Polish bond yields are also rising, but we expect them to consolidate in the first half of today’s session, given the large scale of yesterday’s movement and the stabilization of base markets overnight. The global risk‑off and bond sell‑off do not translate into a weakening zloty.
The EUR/PLN exchange rate is falling this morning
The EUR/PLN rate fell to 4.3274 this morning and we see potential to test the support level of 4.3220.
It also affects the dollar, which is slightly strengthening (EUR/USD fell to 1.1380).
Yesterday’s domestic indices fell around 0.2‑1.1%. The zloty market remained stable.
The EUR/PLN rate stayed in the 4.322‑4.333 range, i.e. the range observed over the last few days. The interest‑rate market continued its upward trend from recent sessions, though the scale of the movement was much larger.
IRS rates rose by about 10‑20 basis points, with the short end of the curve seeing a much larger move. This was a reaction to oil price increases, base‑market moves, and the less hawkish remarks of RPP member L. Kotecki.
According to his remarks, NBP President A. Glapiński did not rule out at the beginning of July that if nothing fundamentally changes relative to projections, he could propose a 25‑basis‑point rate cut at the September RPP meeting.
In L. Kotecki’s view, a lot has changed, and oil prices are much higher. He believes that Polish interest rates are currently at a level close to optimal, and the economy is in equilibrium. The day’s market event was the debt auction.
The reported demand was relatively small, about 13 billion PLN, and the bid‑to‑cover ratio was about 1.16 (the highest ratio was recorded for the NZ0936 bonds), with the highest sales noted for the PS0731 bonds. At the end of the day, 10‑year bond yields were close to 5.88%.
EUR/USD reached its lowest level since the beginning of July
European equity markets were dominated by declines of 0.8‑1.6%. The main event of the day was the European Central Bank meeting.
The EUR/USD rate gradually fell during the day to about 1.137 from about 1.144 at the session open.
The ECB president’s conference did not change this trend, and her tone was relatively neutral. The dovish statement by C. Lagarde on downside risk for economic growth was interspersed with comments on upside risk for inflation, including the real risk of second‑round effects from higher energy prices.
As a result, the EUR/USD rate reached its lowest level since the beginning of July. German bond yields remained in a narrow range of fluctuations with a slight upward trend from the afternoon.
The movement was limited to about 2‑3 basis points. In a similar range, FRA rates for long tenors rose. The market still prices in about three ECB rate hikes this year, with the next fully priced for September. At the end of the session, 10‑year Bund and U.S. Treasury yields ended near 3.21% and 4.71%, i.e. about 3‑6 basis points above Monday’s close.
