Wednesday brought stability to the Polish
FX market, as the forint-led regional sell-off
came to a halt on assurances that PM
Gyurcsany would stay in office. With the
Hungarian contagion over out of the way for
a while investors turned their attention to the
late-night Fed decision on rates and
domestic politics, where tensions seem to
have also eased a bit as coalition leaders
sat down to debate over next years budget.
The three ruling parties agreed to continue
working together on the act and avoid earlier
elections, but as the government spokesman
put it “The coalition still exists, even though
one cannot rule out any scenario, including
earlier elections”. The final showdown will
take place on Monday, when the next
informal government meeting is scheduled
and Tuesday, when the cabinet is to accept
the draft.
The Fed decision on rates and hardly
surprising policy statement had no relevant
impact on markets, and we would look for
more range trade in the 3.95 EUR/PLN area
today. Regional sentiment will be eyed
closely though and some downside is not
out of the question early in the session as
the market has not yet had the chance to
react to yesterday’s Hungary’s rating
perspective downgrade by Fitch.
(CSOB - Investment research)