HALISTER1: INSIDE POLAND: PLN, Bonds Drop as Morgan Stanley Turns Bullish

INSIDE POLAND: PLN, Bonds Drop as Morgan Stanley Turns Bullish

(Bloomberg) -- Polish currency weakens 0.1% to 4.3995/EUR, curbing MTD gain to 0.5%, 2nd best among 24 EM crncies behind Romanian leu.
  • Yld on 10-yr fixed-rate govt bond +2bps to 3.06%, with spread over similar German bunds falling 1bp to 279bps after rising to highest since Feb. 2014 last week
  • Morgan Stanley turned overweight from market-weight on Polish zloty bonds, favoring bonds due 2023 and 2025
    • “Concern about the rating downgrade and fiscal slippage seems valid but an increasing risk premium in the long end could compensate for such risk”
  • Yld on 5-yr bond little changed at 2.25%; yld on note maturing in April 2018 -1bp 1.46%
  • NOTE: Finance Ministry will release details of bond supply for Feb. 18 auction at 3pm today; it planned to offer 2b-6b zloty of bonds, it said Jan. 29
    • Ministry will offer 5-yr benchmark PS0421 and “potentially” some floating-rate notes, according to Bank Pekao note to clients
  • WIG20 stock jumps -0.2%, after adding 1.6% in past 2 days
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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