Traders held to the sidelines on Monday
awaiting news on the coalition forging
efforts. Consequently the Polish zloty
hovered in an extremely tight range between
3.96 and 3.97 EUR/PLN all day long. Even
though there was no fresh information on
politics on the table the market completely
ignored both the last batch of eco data this
month (see more in the fixed income part).
The government was supposed to accept
the 2007 budget act today, but with Zyta
Gilowska back in office this has been
rescheduled and now will take place
tomorrow.
Some cosmetic changes can be
expected in the draft since Gilowska is to
perform tha lsat rounf o talks with cabinet
ministers today, but there is no doubt that
the PLN 30 bn deficit anchor will remain in
place and that all other major parameters
(macro and the overall revenue estimate for
example) will be unchanged. Meanwhile
news on the coalition is still inconclusive and
tomorrow’s MPC decision on rates seems
(fully) predictable so we should see yet
another calm session for the zloty today.
(CSOB - Investment research)