Halister News

(Bloomberg) -- With core rates moving higher, some investors may have used Poland as a proxy to reduce duration risks, Morgan Stanley strategists led by Gordian Kemen say in note.

• Bank’s long recommendation for 10-year Polish bonds “was stopped out at the revised stop-loss of 3.15%, generating P&L of 12.8% including the gain in FX,” with Tuesday 9bps selloff “driven by strong industrial output, retail sales, PPI and position- unwinding from investors”
  • Ten-year bond yield falls 3bps Wednesday to 3.32%, after rising rose 21bps over the last eight days
• Morgan Stanley sticks with short HUF view and continues to recommend long PLN/HUF, targeting 73, as Hungarian central bank “left the option of further easing and additional unconventional tools on the table, while in Poland front-end yields have started to move higher in line with the stronger economic data seen this week”
  • PLN/HUF +0.2% at 72.15

To contact the reporter on this story: Adrian Krajewski in Warsaw at akrajewski4@bloomberg.net To contact the editors responsible for this story: Ven Ram at vram1@bloomberg.net Anil Varma