U.S. President D. Trump declared on Friday that if China or Russia were to get involved in helping Iran, it would be very bad for them, although he says there is no such place for it at the moment.
The U.S. and Iran have halted the exchange of fire, which has contributed to a drop in oil prices (to about $90 per barrel of Brent) and a 5-7 basis point strengthening in base debt markets. This may also favor domestic bonds today.
After strengthening at the end of last week, the zloty remains near 4.31, and a downward move in the EURPLN rate may continue, although the 4.30 level is unlikely to be beaten today.
Good Ifo readings and U.S. data may also help curb the downward movement of yields in base markets and stabilize the EURUSD rate.
Market participants will await the Fed's Wednesday meeting and the debt auction.
The last session of the week on the domestic equity market was dominated by red. Index declines were however marginal, around 0.2%.
The currency market has been stabilizing above 4.30 for some time, and although the zloty's volatility remained limited, the zloty has gradually gained value.
EURPLN falls by 2 grosze!
The EURPLN rate fell during the day from about 4.33 to about 4.31, reaching the lowest levels since the first week of July. On the domestic interest rate market, after a significant rise in previous sessions, rates on Friday saw a correction of about 10 basis points on the short end of the curve and about 13 basis points on the long end.
The strengthening of bonds had a slightly smaller scope, and by the end of the day 10‑year bond yields were close to 5.79% after a drop of about 6 basis points.
Oil price down
International equity markets were dominated by green and index gains of about 0.9-1.5%.
Sentiment supported better-than-expected preliminary readings of PMI business activity indices for industry and services in the eurozone and the U.S. (mainly services).
The Middle East conflict remains in focus.
A White House representative announced that U.S. and Ukrainian presidents, D. Trump and W. Zelensky, will meet on Tuesday in Washington.
Hope for a return to talks was also supported by market sentiment and falling oil prices.
They fell to about $96 from about $100.
EURUSD fluctuations were marginal and fell to about 1.137 from about 1.142. In base debt markets, as well as domestically, after a longer period of rises, there was a downward correction of about 3-4 basis points.
At the end of the session, 10‑year Bund and U.S. Treasury yields ended near 3.17% and 4.66%, respectively.
