The agreement between the US and Iran led to a decline in benchmark bond yields and strengthened the euro against the dollar to about 1.16, which could positively affect the zloty and domestic debt. This week, moderate importance for the domestic market may be given to detailed CPI data and industrial production figures.
The Wednesday bond auction (the tender will also be conducted by BGK) will be significant. The finance ministry should also publish estimated budget execution data. Abroad, important for markets will be decisions on interest rates, and potentially a hawkish message at the first conference of the new Fed chair could strengthen the dollar.
Green Friday in Warsaw: GPW indices surged, the zloty rebounded
On the equity markets, the Friday session was marked by gains in major indices. The main GPW indices rose by about 1.7‑2.3%. On the domestic currency market, after a slight weakening of the zloty at the session opening to around 4.255, the currency rebounded to about 4.243 with minor moves in the EURUSD rate.
The zloty rebound occurred despite a weaker-than-expected current account balance reading. On the domestic interest rate market, rates continued to fall by about 10‑12 basis points. The scale of the bond yield decline was similar. At the end of the session, 10‑year Treasury yields were close to 5.60%.
US consumers in better moods. Michigan Index well above expectations
On European equity markets, major indices rose by 0.3‑1.8%. Fluctuations in the main currency pair EURUSD were marginal, and the rate slightly increased during the day to about 1.159 from about 1.155. On core debt markets, yields fell at the session opening, aided by a decline in German inflation.
Later, yields rebounded upward by a few basis points, which may have been influenced by data released by the University of Michigan.
The consumer sentiment index in the US rose in June to 48.9 points from 44.8 points in the previous month, against market expectations of 46.1 points. At the end of the day, 10‑year German bond yields were about 4 basis points below the mid‑day close at 2.99%, and US yields were about 2 basis points above the mid‑day close at 4.48%.
Earlier on Friday, the US administration informed that the text of the preliminary agreement with Iran had already been agreed upon and would include the opening of the Strait of Hormuz and the lifting of the blockade; the dismantling of Iran’s nuclear program along with the transfer to the US side of enriched material that would be destroyed.
All this in exchange for easing sanctions and reintegration with the global economy.
