Daily analysis 17.06.2015

Have the surveys influenced the direction of the final Greek solution? The risk related to Athens is more visible on the debt instruments market, than on the European currency. The zloty remains stable, although pressure on the PLN can significantly increase in the second half of the week.

Most important macro data (CET). Estimations of macro data are based on Bloomberg's information, unless marked otherwise.

• 14.00: The index of base inflation from Poland (estimations: +0.4% y/y; 0.0 m/m)
• 14.30: The real estate market from the USA (construction work initiated in May: 1,09 million, permission for construction work 1.1 million; both readings are seasonally equalized and annualized)

Have the surveys influenced the direction of the final Greek solution?

The past few hours have not brought any crucial events regarding Greece. We only received a short comment from Mario Draghi. He claimed that the matter of Greece is beginning to go in unknown directions. It suggests that the lack of an agreement can lead to serious perturbations.

What are the sentiments in Greece? The surveys prepared by Mega TV and quoted by the Bloomberg agency, probably reflect it in the best way. 56.2% of the respondents are for remaining in the eurozone, even if it relates to the policy of deeper savings. On the other hand, 35.4% of the respondents think that it is better to go bankrupt and abandon the euro.

This situation looks slightly different among the people who supported Syriza in the elections. Here, there is a two percent advantage for those, who want to declare insolvency and the return to the drachma, if the creditors will demand further savings. What's interesting, 68% of the respondents think that the negotiations will end with an agreement, and it will be Greece that will have to compromise. Only 19% believe that the creditors will abandon their demands.

The pressure from troika seems to be bringing results, and the citizens are getting a more realistic look at the situation. This also increases the chances for understanding, although it is still unlikely that it will be achieved quickly. It will probably occur at the last possible moment. However, despite the increasing problems, an introduction of the capital's control or Greece's bankruptcy should not be an option. The probability that Greece will abandon the eurozone is of course even lower.

Debt instruments and Fed

Problems regarding Greece are significantly more visible on the debt instruments market, than on the common currency market. The euro has practically stopped reacting to the news from Greece. On the other hand, the spread between the profitability of Spanish and German 10-year-old treasury bonds has increased from 110-120 base points observed in May, to 160-170 base points.

A bigger aversion towards risk can spear the euro on, due to tomorrow's summit of the Fed. Yesterday's weaker data from the American industry and the crucial signals that can be generated on Wednesday evening are probably forcing the investors to secure themselves on bonds, rather than on currencies.

Few words about the foreign market

Today's session on the EUR/USD should still be relatively calm. However, if tomorrow the Fed appears to be relatively hawkish, and the published macroeconomic projections suggest the increase in interest rates in September, the dollar can significantly gain value. If one would combine it with the possible cumulation of fear regarding Greece at the end of the week, Friday's quotations of the main currency pair can be significantly lower than they currently are.

The zloty remains stable, but the tension is growing

Yesterday's data from the national currency were not favourable for the zloty. The slower exit from deflation decreases the chances for raising the interest rates, even in the second half of 2016. Additionally, the composition of the current account's positive balance was less advantageous than in the first quarter. This can stop supporting the PLN.

The events outside of the country, are however most important in the short-term. On Wednesday, it will be the summit of the Federal Reserve. During tomorrow evening, the movement upwards can even be 0.10 PLN on the USD/PLN. Especially if the Fed will appear to be more hawkish than the market expects (yesterday we wrote about the estimations regarding the future interest rates). Additionally, the matter of Greece can also appear important in the forthcoming days. As a result, we may pay more than 3.80 PLN per dollar, over 4.00 PLN per franc, and the EUR/PLN can test 4.20.

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

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