The days with record low profitability and record-high prices of Polish bonds are behind us. According to some economists, this is a result not only of the NBP interest rate hike but also of very poor communication with the market on the part of the Monetary Policy Council. After the last hike, investors do not know today whether it was a one-off hike or the beginning of the cycle and there will be more in a moment. Such uncertainty causes nervousness and, as a result, the supply of bonds increases on their part, which lowers their prices and, at the same time, increases their profitability – thus, market interest rates rise even more than official rates at the NBP.
The profitability of 10-year bonds broke above the level of 2.5 percent for the first time since 2019. Even in July, it was at the level of 1.5 percent. In turn, the yield on 2-year bonds is already around 1.6 percent. On the eve of the interest rate hike, it was around 1 percent, so it managed to grow by 0.6 percentage points since then, although the hike was just 0.4 percentage points.
The profitability of Polish bonds grew at a similar pace for the last time in 2016. Then it grew from around 2.6 percent in a few months up to 4 percent in the case of 10-year securities.