Afternoon analysis 11.05.2015

, author:

Piotr Lonczak

The Germans change their standpoint concerning Greece. It can suggest that the chances for further compromises towards the government of Alexis Tsipras will increase. However, the euro remains under the pressure. Sale of the zloty carries on.

Empty macroeconomic calendar moves the investors' interests on the information concerning Greece. Monday brings quite a surprising turning point – Berlin is willing to agree to the Greek referendum about the aid program.

Before starting today's summit of the eurogroup, the German minister of finance Wolfgang Schaeuble said, that “if the Greek government claims, that they need to conduct a referendum, we should allow them to” - Reuters reported.

Such solution was previously denied, as a potential destabilisation for the financial markets. Additionally, the European politicians claimed, that there is not enough time to conduct the voting. Now however, it appears that the attitude towards the expectations of Alexis Tsipras' government has changed to definitely more flexible.

Tone soothing towards the Greeks' expectations, comes at the finish line of negotiations. Just before the crucial date of May 12th. Tomorrow Greece must pay their debt to the International Monetary Fund, which value is 750 million euro. Yanis Varoufakis, the Greek minister of finance, assured during the meeting with his German equivalent, that tomorrow's payment will be settled according to the plan.

It still remains an argumentative matter, was there any progress in negotiations between Greece and the experts of the Troika (which are the representatives of the International Monetary Fund, The European Commission, and the European Central Bank). Wolfgan Schaeuble evaluated, that it was rather small. Meanwhile Athens demand an official communicate about a significant progress in the negotiations.

Such solution could allow to unblock a short term financing for Athens, or would give a chance for a payment of at least a part of 7 billion euro worth aid which is at stake. However, such scenario is very unlikely.

Recent news concerning Greece indicate, that the situation is very dynamic. One can get the impression, that the eurogroup's standpoint is getting more and more favourable towards the expectations of the Syriza government. It comes out of the fact, that every side wants to avoid the scenario of Athens insolvency, because it would be very expensive. However, this fact did not have an impact on the improvement of the euro's records, nor the improvement of sentiment on the financial markets.

The zloty continues to wear off

Today the uncertainty concerning the future of Greece, is a burden for stock market indexes in Europe. Also the session on the American market did not ran in the best atmosphere.

Intensification of aversion towards risk, creates a disadvantageous environment for the currencies of the emerging markets. Thus we can observe a clear wear off on the zloty. Today, the Polish currency loses especially in relation to the pound, which is recording some very good results, and also in relation to the dollar and the euro. The attitude of the franc is also an evidence of aversion towards risk. The Swiss currency is clearly increasing in relation towards the euro and the zloty. Today the CHF/PLN rate has crossed again the level of 3.90 PLN.

Surprising result in presidential elections impacts on the rate of the Polish currency in smaller degree. In case of Poland, the president's influence on country's economic and fiscal policy is limited. The elections to the parliament in Autumn, will have much bigger meaning. The currencies of mid-eastern Europe decrease their value in a similar range as the zloty. Until a significant limitation of aversion towards risk on the wide market, the zloty will remain under decrease pressure.

This commentary is not a recommendation within the meaning of Regulation of the Minister of Finance of 19 October 2005. It has been prepared for information purposes only and should not serve as a basis for making any investment decisions. Neither the author nor the publisher can be held liable for investment decisions made on the basis of information contained in this commentary. Copying or duplicating this report without the written permission from Sp. z o.o is prohibited.

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