Daily analysis 03.07.2015

Surveys do not give an answer to what the result of Sunday's referendum in Greece will be. It is possible that unmeasurable factors will decide about it. If it appears that the program of reform is rejected by Greece, the zloty may be pressured on Monday.

Most important macro data (CET – Central European Time). Estimations of macro data is based on Bloomberg's information, unless marked otherwise.

• The voting in Greece ends at 18.00 on Sunday. It is not clear whether the exit polls will be available instantly. It is likely for the first official estimations to appear just before midnight on Sunday.

Surveys do not give a clear answer

Another exciting weekend is ahead. The last one ended with the introduction of the control of capital flow after the discussions between Greece and its creditors were broken. This on the other hand can bring Athens closer to leaving the eurozone.

The referendum awaits Greece on Sunday. Its result will be either acceptance of the reform forced by the creditors, or its rejection. If the citizens vote “yes”, it is most likely that the reigning Syriza along with the opposition will return to negotiations with the creditors and Greece will use the common currency for the coming years.

On the other hand, the situation gets much more complicated in the case of a majority of “no” votes. It is not entirely clear what actions the creditors will undertake, even though many of them think that it will bring Greece closer to exiting the eurozone. It is also difficult to foresee how the Syriza behave. The fact that the society will choose the confrontation strategy does not mean that Troika will fulfil Tsipras' demands.

Surveys basically do not give any hints. In an exclusive study of the Bloomberg agency and the University of Macedonia, 43% of the respondents claim that they will vote for “no”, and 42.5% accept the reform forced on them by Brussels. Despite the fact that there are slightly more opponents of Troika's plan, the chances for a “yes” are increased by the answers to the question about remaining in the eurozone. 81% think that it is the best option for Greece.

Difficult-to-measure factors will decide

The observers of the political scene in Greece indicate that there are a few factors which may significantly distort the surveys. First of all, voting is only possible in the place of registered residence. This means that the inhabitants of cities do not have the possibility to express their opinions without getting back home. Because travelling around Greece is often related to significant expenses and access to cash is currently limited, it may be favourable for the “no” result.

The second matter is the mass “yes” campaign in the private media. However, some Greeks consider their owners to be oligarchs who only care about remaining influential, which will be easier in the eurozone.

The third thing may have the greatest significance for the difference between the results of the surveys and the final result of the referendum. Many Greeks consider the “yes” answer as non-patriotic and even shameful. On the other hand, when facing this question in the household, many may come to conclusion that remaining in the eurozone may be better. Especially that the future outside of it seems really unclear. These are the reasons for which the “yes” option may eventually prevail.

Few words about the currency market

If the Greeks reject the creditors' plan, the EUR/USD may clearly lose value during the opening of a session in Asia. A further reaction of the euro will depend on the comments from the politicians of the eurozone and hypothetical plans for returning to negotiations. If no negotiations occur and the society expresses their disappointment on the streets, pressure on the euro will increase within a day. Going below 1.10 would then be the base case scenario.

On the other hand, an increase in the EUR/USD is expected, if Greece accepts the Troika’s propositions. However, this increase will be limited due to the risk of “revival” of carry trade, which may take the initiative on the euromarket in case of sentiments' improvement.

Reaction on the zloty

If the Greeks decide to reject the plan of reform forced on them by Brussels and there is no intervention from the central banks, the franc is likely to cross the level of 4.05 on Monday morning. It is also possible that the dollar will again cost more than 3.80 and the euro will effectively test the area of 4.20. Further movements will depend on the creditors' reactions on the referendum result. Tension on the market should decrease, if the return to negotiations occurs. However, any kind of commotion or hypothetical decision chaos in Brussels, will cause an increase in pressure on the zloty and CHF/PLN can reach even 4.10 on Monday.

In the case of the solution preferred by the market, which is a victory of the “yes” option and Syriza resignation from conducting negotiations, the franc should go below 3.95 PLN, and the EUR/PLN can reach the area of 4.15. The American dollar should also clearly lose in the first movement, but its wear off can be withheld by activation of carry trade on the European currency.

Anticipated levels of PLN according to the EUR/USD rate:

Anticipated GBP/PLN levels according to the GBP/USD rate: