Expected higher volatility of the EUR/PLN rate
This may result in slightly higher volatility of the EUR/PLN rate, which in the morning fluctuated between 4.2889 and 4.2910.
The dollar, however, strengthened against the euro during the U.S. session and the EUR/USD rate reached 1.1447, but fell to 1.1427 early in the morning.
Attacks in the Strait of Hormuz and a worse sentiment around Asian tech companies may support the dollar today and negatively affect the zloty and domestic assets.
The first session of the week was quite calm in the domestic market with little volatility. The EUR/PLN rate was in consolidation, as we expected for this week.
In the first part of the day, the zloty gained against the euro, reaching 4.2855 after 10:00. Later, however, a V‑shaped rebound occurred and the rate returned to around 4.2905, close to the opening level of the session.
EUR/PLN traded at 4.2910
Afternoon changes were smaller, and finally at the European close the EUR/PLN traded at 4.2910. Against the dollar, the zloty weakened very gently. At the close of the European part of the session, the USD/PLN rate was 3.7597, 1.5 grosz above Friday's close.
Consolidation in the currency market may have been aided by stability in the energy commodity market and domestic SPW.
Yield of the Polish 10‑year bond
The yield of the Polish 10‑year bond showed marginal changes and closed the session at 5.24%, only 3 basis points above Friday's close. The domestic stock indices were somewhat more volatile, but they also generally consolidated on Monday.
The return of investors from the U.S. after a long weekend did not lead to higher volatility in the markets on Monday. Newly released macro data also did not provide stimuli, due to the average weight of readings and their alignment with consensus forecasts. Consequently, the session in international markets was very calm, as was the domestic market.
EUR/USD traded at 1.1415
The EUR/USD rate experienced slight movements. Before noon, the euro weakened slightly, pushing the rate to 1.1410, then consolidated in a channel of 1.1409–1.1423. Finally, at the end of the European session, EUR/USD traded at 1.1415, 0.3% below Friday's close.
Consolidation in the currency market was aided by stable crude oil prices, around 72 USD per barrel of Brent. TTF natural gas slightly fell, reaching 44.78 EUR/MWh at the European close, but the range of movement was very small. Global stock indices also saw small changes. Base bond yields rose slightly, which we considered to have a technical basis.
U.S. 10‑year yields opened below Friday's close; in the afternoon, the yield reached the support level of 4.452% and rebounded from it, causing a slight overvaluation at the end of the European part of the session. Finally, at the European close, the yield of the 10‑year U.S. bond was 4.48% (unchanged from Friday's close), and the German yield was 2.94% (up 1 basis point).
