Afternoon analysis 04.05.2015

The zloty gains thanks to the strengthening of the risk appetite. The euro made up for a part of the morning losses. Big increases on stock exchange.

The Monday session started with a significant increase of the risk appetite on the wide market. The green dominated the most of the European markets. The German DAX was especially outstanding, gaining at times by 1.3 percent. Good sentiments prevail also on the other side of the ocean. The S&P 500 index rose by 0.5 percent.

The news concerning Greece are quite positive. Although the agreement before Sunday, announced last week, was not reached, the reports say that talks are still run. According to the Reuters reports, the main differences concern the reform of retirement system.

Today the spokesman for the Greek government, Gabriel Sakellaridis said that even though the government is to fulfil its liabilities (including payments to the International Monetary Fund in the amount of the 1 billion euro), finding the source of the new money inflow before the end of the month might be difficult.

Currently, the unofficial speculations indicate Wednesday as the day of the expected date of signing the agreement. This should allow the eurogroup making a decision during the coming meeting on May 11th. The next day - May 12th - Greece has to make a payment to the IMF in order to aviod declaring bankruptcy.

The American data

The final data concerning the orders in the American industry was better than the first reading. The durable goods orders rose by 4.4 per cent - more than predicted 4 percent. Also the report after excluding transportation was better, showing a 0.4 percent increase against expected minus 0.2 percent. The industrial orders data was solid, showing an increase by 2.1 percent after fall by 0.1 percent.

The recent data from over the ocean was worse than expected. This factor shifted the expectations to raising the interest rates from the middle of the year to September. If coming readings confirm the theory about the weakening American currency, then the dollar might fall more significantly.

The key reading in the days to come will be the report from the labor market. The data will be presented on Friday, and before it there is still a series of less significant indicators from the labor market. Nevertheless, if the reports show that what happened in March was not a random disappointment, but a signal of the employment worsening, then the dollar will lose its value.

Stronger zloty

The second part of the session was very positive for the zloty. The Polish currency gained in relation to all important pairs.

The zloty managed to use the enforcement of appetite for risk on the wide market, in a very effective way. Strengthening of the demand for the assets with high profitability, was a result of quite positive information concerning the negotiations between Greece and its creditors. Additionaly, the data from the USA were supporting the hazardous assets. The report about orders is still considered as one of the weakest data in the economy, which moves the increases of interest rates. At the same time, the data are not that bad, that they could cause some nervous actions of the investors.

Currently, the zloty remains in its position to appreciation. The Polish currency should extend its profits, if the sentiment towards hazardous assets will remain favourable.