The Polish zloty started Wednesday’s
session with an edge against the euro, but
quickly settled into a tight range in the
EUR/PLN 3.82 before the unit had the
chance to extend the rally. With the MPC
rate decision and statement no market
movers other issues got to the headlines,
among them the NBP presidential race.
Urszula Grzelońska was quoted in one of the
daily papers as saying that she may drop out
of the race if she is forced to bring certain
people on board with her as part of the deal.
Grzelońska denied any further comments on
whose nomination she might oppose, which
if anything, is yet another signal that
communication with markets is not her
strongest point and an evident sign that the
ruling conservatives have yet to make the
final call on the potential list of candidates
for the post. Meanwhile the PM Jarosław
Kaczynski reiterated his personal skepticism
on a hasty euro-zone entry and denounced
speculations that Grzelońska’s chances of
taking over from Leszek Balcerowicz were
given a blow after she had made a similar
remark earlier this month.
We must
acknowledge that even though Grzelońska
remains the top contender for the presidency
the other potential candidates seem to have
closed the distance somewhat in recent
days. As such the race remains wide open
with the final decision from the president
expected before Christmas. The zloty
ignored the pre-announced information on
Poland’s updated convergence program,
which sees the general government deficit
drop to below 3.0% of GDP in 2009 (see
more in yesterday’s daily). The only
interesting fresh piece of information here
were the GDP growth estimates. While the
5.1% y/y forecast for both 2007 and 2008
does not differ significantly from our
expectations, 5.6% y/y expected by the
FinMin in 2009 is a bit on the high side and
most likely highly dependant on effective
absorption of EU funding.
Today, the Q3 GDP numbers will
be the highlight of the session and even
though our growth and composition estimate
is basically identical to the market
consensus, recent data on investment
outlays suggest that we may be up for a
(positive) surprise. If growth does come in
above 5.5% y/y the zloty may see a move
closer to 3.80. Otherwise all should once
again come down to the regional sentiment
for the PLN today.
(CSOB - Investment research)