EUR/USD reached 1.1425 in the morning
The EUR/USD rate also reached 1.1425 in the morning and is approaching the local support level of 1.1421. If it is defended, it could support the zloty. A potential improvement in global market sentiment, aided by the return of U.S. investors after a long weekend, may also positively affect domestic assets.
Futures contracts on the S&P 500 index show that the correction is slowly coming to an end, although the technology sector still awaits a full rebound. Signals from energy commodity markets are more mixed.
Brent crude oil prices remain at relatively low levels of 72.28 USD/bbl. However, natural gas prices (TTF) have risen to 45.69 EUR/MWh due to significantly lower-than-seasonal blue fuel inventories in Europe. Additionally, distillate prices remain higher than before the Gulf War.
In this situation we expect consolidation of domestic bond yields, also due to the large scale of the decline over the past two weeks (the yield on the Polish 10‑year fell by over 20 basis points to 5.25% as of June 22).
EUR/PLN rate
The Friday session on the domestic financial market was very calm. The EUR/PLN rate fluctuated throughout the day in the range 4.28-4.29, aided by the lack of macroeconomic data releases and the absence of U.S. investors. By the end of the day the EUR/PLN rate was quoted at 4.2850, similar to the previous day.
The debt market session followed a similar pattern. Throughout the day bond yields remained at levels close to Thursday's close. By the end of the day the 10‑year yield was 5.22%.
The absence of U.S. investors (Independence Day holiday) and a sparse economic data calendar also contributed to the stabilization of base market prices. During Friday's session the EUR/USD rate fluctuated in a very narrow range of 1.1430-1.1470, closing the session at 1.1447.
Debt market
Investors did not react to the data published in Europe, including the final ISM index reading for the European services sector. Minor fluctuations also affected base debt market prices. However, a cooling of sentiment and a rise in yields were visible, albeit on a limited scale. By the end of the day the German 10‑year yield was 2.93%, 2 basis points lower than Thursday's close, while its U.S. counterpart was 4.48%, only 1 basis point higher than Thursday.
