21:35 25 November 2021
Post by: WBJ

Inflation made the zloty weaken and the bond market sell-off

Inflation made the zloty weaken and the bond market sell-off
Source: Newseria

In October, the price growth rate reached 6.8 percent, which is a dynamic that has not been seen since the first half of 2001. Although we had to deal with two interest rate increases, they still remain much lower than the market rate (WIBOR) and lower than inflation. As the scale of both increases came as a surprise to the market, we experienced the greatest sell-off in the bond market, especially long-term ones, and the zloty weakening in history. 

"Market quotes from interest rate contracts show that an increase of about 1.5 percentage points is expected in the next three months. This would mean that around March the rate should be close to 3 percent, and in 12 months' time – 3.25-3.5 percent. And at this value, the cycle would end. The problem with forecasting, however, is that there is basically no consistent communication from the MPC," Aleksander Szymerski, fund manager, Generali Investments TFI, said.

In his opinion, even the composition of the MPC from next year is a mystery – seven out of ten members will end their terms between January and March 2022.


aleksander szymerski
generali investments tfi

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