__lc_cid
Valid: 3 years
Necessary for proper functioning of the chat available on the website.
__lc_cst
Valid: 3 years
Necessary for proper functioning of the chat available on the website.
rc::a
Valid: It does not expire
Cookies to correctly distinguish between human and bot-generated traffic.
rc::b
Valid: 1 session
Cookies to correctly distinguish between human and bot-generated traffic.
rc::c
Valid: 1 session
Cookies to correctly distinguish between human and bot-generated traffic.
NID
Valid: 6 months
Records a unique number to recognise the device you are using. It is used for advertising.
_ga
Valid: 2 years
Registers a unique user number to collect statistical data about how you use our website.
_gat
Valid: 1 day
Used by Google Analytics to reduce queries. Reduces the amount of statistical data collected.
_gid
Valid: 1 day
Registers a unique user number to collect statistical data about how you use our website.
yt-player-bandwidth
Valid: It does not expire
Determines the best video quality based on your device and the Internet connection used.
yt-player-headers-readable
Valid: It does not expire
Determines the best video quality based on your device and the Internet connection used.
CINKCIARZ_FX
Valid: 1 session
Maintains user sessions.
csrfToken
Valid: It does not expire
Protection against csrf attacks.
user
Valid: It does not expire
Stores information that indicates whether the user is from the USA.
browserId
Valid: It does not expire
Required for trusted browsers to function properly.
collect-bank-#
Valid: It does not expire
usłudze Collect. Remembers the last chosen bank in the Collect service.
collect-country-#
Valid: It does not expire
Remembers the last chosen country in the Collect service.
collect-currency-#
Valid: It does not expire
Remembers the last chosen currency in the Collect service.
social_offer_top20_currency-#
Valid: It does not expire
Remembers the last chosen currency in the Social transactions service (Top 20 List).
social_offer_exchange_buy_fc-#
Valid: It does not expire
Remembers the last chosen currency in the Social transactions service (First currency to buy).
social_offer_exchange_buy_sc-#
Valid: It does not expire
Remembers the last chosen currency in the Social transactions service (Second currency to buy).
social_offer_exchange_sell_fc-#
Valid: It does not expire
Remembers the last chosen currency in the Social transactions service (First currency to sell).
social_offer_exchange_sell_sc-#
Valid: It does not expire
Remembers the last chosen currency in the Social transactions service (Second currency to sell).
#-service-popup
Valid: It does not expire
Remembers choosing "Do not show this message again." when changing providers.
missing-required-fields-form-#
Valid: It does not expire
Records information that the missing data form has been shown to the user.
A clear depreciation of the German ZEW index caused by the economists anxieties regarding Brexit. Moody's placed Turkey's rating on a downgrade observation list. The Polish government will give its opinion regarding the retirement age today. The EUR/PLN should remain below the 4.40 level.
Most important macro data (CET – Central European Time). Estimations of macro data are based on Bloomberg information, unless marked otherwise.
Is lower ZEW significant?
We received the ZEW index reading shortly after 11.00. The economist estimations regarding the future condition of the German economy were significantly worse than one month ago. The index went from the level of 19.2 points to negative 6.8 points, against the approximately 9 points expectations. Moreover, this publication is the weakest since November 2012.
In his data commentary, professor Wambach, the ZEW Institute chairman, claimed that, “Brexit was surprising for the majority of the market experts. The uncertainty regarding the German economy is mostly responsible for a significant deterioration of the economic sentiment. The anxieties especially concern the future of export, as well as stability of the European banking system that may be a burden for the economic perspectives.”
The description of the index, as well as its reduction are disadvantageous. On the other hand, it is worth focusing on the elements that may reduce a negative tone of the ZEW. The current situation index remains relatively positive, and it went down from 54.4 points to 49.8 points. The question asked by the Institute is: will the situation deteriorate, remain the same, or improves in the following six months?
Taking under consideration the recent events, as well as the fact that the surveys were received during a broad discussion regarding the Italian bank system, it was difficult to hope for the situation to improve. However, the real unknown is the scale of this deterioration from the current high levels. If it is relatively small, we may assume that the result is slightly overestimating the danger. Moreover, the situation may not be as bad as the index withdrawal to the level from 2012 would indicate.
On the other hand, the ZEW level for the United Kingdom may seem interesting. This is not the index that the market usually focuses on. This is because there are many better measures for the future condition of the British economy, rather than the opinion of the German economists. However, in times of the uncertain monetary policy of the Bank of England, as well as the shock caused by Brexit, this index may be a certain argument for milder monetary policy.
The ZEW for the British Isles went down from the level of negative 12.5 points, to the level of negative 77.2 points. This is the lowest level in twenty-four years. Due to the fact that the index establishes a range from positive 100 to negative 100, basically every economist had to estimate that in six months the UK economic situation will be worse, or at least the same as it currently is.
Turkey is on its way to junk rating
Yesterday, each one of three main rating agencies referred to the weekend events in Turkey. Fitch will observe, “whether the government's reaction will increase the political differences, as well as weaken independence of the institution.” The S&P claimed that it will estimate implications of the events in Turkey. On the other hand, Moody's placed Turkey's rating on the downgrade observation list. This path to a downgrade is much faster, as well as more likely than a decrease in perspective. According to information of Moody's, once a rating of a particular country is placed on the observation list, its loan credibility gets downgraded within 30-90 days in more than half of cases.
Moreover, Turkey's rating is at the edge of investment and speculative levels. If Moody's downgrades it, the two other agencies (S&P already evaluates Turkey at speculative level) will evaluate the country at the level that is commonly defined as “junk.”
On the other hand, today's Financial Times explained quite a calm reaction of the lira on the recent extraordinary events, to a certain degree. The journal informed that there were discussions regarding, “aggressive purchasing of the currency by local investors.” However, it is worth noting that such “aggressive purchasing” is basically unsustainable in the long-term. Especially taking under consideration that it concerns the country that has a high deficit on its current account. If the situation in Turkey does not improve significantly, the USD/TRY pair will reach its historical levels rather quickly. Moreover, the lira will become extremely dependent on the global sentiment. In our opinion, this is the base case scenario for the time being.
Zloty sustains majority of its growths
Unchanged rating, as well as a relatively positive global sentiment, caused a significant appreciation of the zloty yesterday. Today, some of these growths are being reduced. However, we do not expect the EUR/PLN to return above the 4.40 level, if the external conditions do not deteriorate clearly.
The matter of the retirement age should return this afternoon. The Minister of Finance, Paweł Szałamacha, spoke with the Polish Radio today. He said that he is a supporter of determining the retirement age by the job seniority. However, it is not clear will his opinion become valid at the government meeting today. However, even if the government supports the unconditional decrease in the retirement age, it should not cause the EUR/PLN to go above 4.40 for the time being. A positive element originating from the decision of the Fitch will most likely dominate over a negative perspective of a larger burden for the budget in the forthcoming years.
However, it may be slightly nervous on the zloty this afternoon. This is because we will also receive the retail sale, as well as industrial production data from Poland. This data will be important regarding the GDP reading for the second quarter. Moreover, this will be a test on whether the consumption has accelerated due to the 500 plus program.
See also:
Afternoon analysis 18.07.2016
Daily analysis 18.07.2016
Afternoon analysis 15.07.2016
Daily analysis 15.07.2016
Attractive exchange rates of 28 currencies
Live rates.
Update: 30s
Download our app
Stay tuned and make managing your favourite currency services faster, easier, and more convient. Wherever you are.