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Afternoon analysis 12.05.2015

, author:

Marcin Lipka

Is Greece paying its loan from the IMF with their contribution to the IMF? The market of debt instruments is still in the centre of attention. Very good data from GUS concerning the foreign trade in the first quarter of 2015, should impact positively on the better reading of GDP, and the current account balance.

Oddity in Greece

Has Greece settled the instalment of their loan from IMF, with the means from the IMF contribution? Such doubts have appeared after an article from Kathimerini newspaper, cited by Bloomberg agency. Athens were to settle one of tranches of their credit from the IMF until today. However, it is not excluded that 650 million from this amount, came from the Greek account in this institution.

Theoretically, such operation wouldn't make sense, if it wasn't for the fact that Athens are counting on getting next tranche of aid within forthcoming weeks. They also have a month to complete their contribution to the IMF. Of course, considering the recent events from Greece everything is possible. But the oddity of this situation, is beginning to reach its limits.

On the other hand, we should still remember that this matter has a political background. It concerns Greece, as well as the European Union. Thus, the expected agreement will occur “five minutes before midnight”. However, it should make the representatives of the international creditors come to proper conclusions. It is negative not only for a particular member of the EU, but also for the whole organisation, and the IMF which indirectly agrees on such manipulations.

Debt instruments

A matter of debt instruments' behaviour in the eurozone, is still a main reason of relatively high records of EUR/USD. At the moment it is difficult to say, whether the increase of debt's profitability has a constant character, and they foresee the increase of inflation in the eurozone, or are they rather caused by closing of some profitable positions, and relatively small liquidity.

Additionally, one should remember that the EBC buys almost 60 billion euro of debt instruments each month. If it was not for these purchases, it is not excluded that we would have more sudden movements on the market. They could resemble the situation from mid 2013, when Bernanke mentioned for the first time about a possibility of gradual exiting from ultra mild monetary policy.

Few words about the foreign market

The EUR/USD market is clearly ignoring the matter of Greece, but constantly pays attention to increases of the European debt instruments profitability. Tomorrow we should also observe the morning data about the German GDP. Good readings from our western neighbour's economy should allow for further increase of bonds' profitability, and maintenance of EUR/USD above 1.1200.

Very good data from GUS

Data about the foreign trade for the first quarter of 2015 have been published today, and they were the best in history. Poland has exported goods worth over 2 billion euro more, than in the same period last year. It's partly an effect of clearly lower price of oil, but also a result of a higher demand for the national goods from the EU countries.

Good data concerning the foreign trade should translate to clearly higher than expectations, positive balance on the current account (publication on Wednesday), and become a positive contribution to the GDP for the first quarter of 2015 (reading also on Wednesday). Thus, it is not excluded that the economists' consensus (0.8% q/q and +3.3% y/y) will be crossed. Both matters should be positive for the PLN in mid and long term. However, if the nervousness will continue to dominate on the debt market, even such good data may not translate to the PLN enforcement.


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 Cinkciarz.pl Sp. z o.o is prohibited.

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