Zloty seen stable, correction on T-bond comes to end

"I do not think that until the Monetary Policy Council sitting and US elections we can witness any major changes on the zloty market . . . the zloty rate could remain in the 4.10/4.12-4.15 range against the euro," BNP Paribas FX dealer Jan Koprowski told PAP.

"The November rate cut is already priced in but everybody will pay close attention to the Council's comments and investors will try to figure out what the path of further cuts will be and how it might impact the zloty," the dealer added.

The MPC gathers for a two-day sitting on Tuesday, November 6.

On the T-bonds market, the beginning of the session was weak, with prices falling on the long and in the middle of the curve, Millennium Bank FI trader Krzysztof Szczerbinski told PAP. "Then sales stalled and the market rebounded after a sharp decline."

The Tuesday market moves took place on a shallow market, the trader noted.

The correction witnessed on the Polish T-bonds in recent days lost momentum, the trader pointed out.

"We have reached levels at which it could be forecast that sale [of T-bonds] would stall," Szczerbinski said. "After strong price increases an inevitable correction came [but] not it has reached levels which encourage purchases of Polish bonds."

Now the activity on the market will likely die down towards the end of the week and "the bonds should be stable if the zloty remains stable," the trader forecasts, adding that the market is waiting for the MPC sitting and "especially for the comments" following the sitting.