Dollar and oil set conditions. The zloty under Fed pressure
The zloty remains influenced by capital rotation to the dollar, linked to the hawkish tone of the Fed meeting. With signs of progress in US-Iran negotiations, Brent crude prices fell in the morning to 76.7 USD, matching the lowest level since February. This shift in sentiment may support domestic and foreign bonds today. During the night, in the US session, moderate index declines occurred, with the Nasdaq‑100 falling the most, dragged down by SpaceX.
In this situation, macroeconomics may shift to a slightly further plan, due to geopolitics and to a lesser extent market sentiment. We therefore do not expect PMI index releases to significantly increase volatility.
Technical breakthrough on EURPLN
On the domestic equity market the color was predominantly red, and index declines were close to 0.1‑0.5%. The zloty lost value in yesterday's session to about 4.276 from about 4.258.
Other regional currencies also fell, but the zloty's losses were relatively largest. This was accompanied by a continuation of the dollar appreciation trend from the previous week. The technical resistance at 4.265 drove further zloty depreciation, and this scenario matched our assumption for this week.
On the interest‑rate market, there was a strengthening. Domestic rates gradually fell during the day against the German market and the decline in oil prices and slightly weaker domestic data than consensus. The total rate drop was about 7 bp across the swap curve. The yield decline range for bonds was slightly smaller.
At the end of the session, the 10‑year bond yield was about 5.42%. The Ministry of Finance announced that in the 24 June auction it will offer six series of bonds totaling 7‑12 billion PLN: OK0129, NZ0331, PS0731, DS1035, DS0436 and NZ0936.
USA suspends sanctions on Iranian oil, commodity prices fall sharply
During the Asian session, equity markets were dominated by green color and modest gains of about 0.5‑0.6%. Yesterday morning the Chinese central bank decided to keep interest rates unchanged (1‑year rate at 3% and 5‑year near 3.5%).
Regarding the commodity market, after a strong opening, oil prices gradually fell from about 82.5 $ to about 78 $ in hopes of positive development of US‑Iran negotiations. On Sunday, Pakistan and Qatar announced the creation of a de‑conflict cell for Lebanon.
The head of the US Treasury Department announced that the US has suspended sanctions on the extraction, sale and transport of Iranian oil for 60 days, as part of an agreement with Iran.
Iran, meanwhile, committed to opening transit through the Strait of Hormuz. US Vice‑President J.D. Vance said Tehran agreed to a visit by inspectors from the International Atomic Energy Agency (IAEA) and that frozen Iranian funds will be used to purchase goods from the US.
The EURUSD rate oscillated in a narrow range. After a slight rise in the first part of the session to about 1.146, the rate temporarily fell to about 1.143. Information from the UK, where Prime Minister K. Starmer resigned and was likely to be replaced by A. Burnham, had limited impact on the market, although the pound gained against the euro. In basic debt markets, changes were mixed.
In the German market, strengthening occurred already at the opening and the yield decline continued during the session. In the US market, a gradual weakening occurred during the day. At the end of the day, 10‑year German bond yields were at 2.94% and US yields near about 4.50%.
