PLN: Better Risk Sentiment Aids Zloty
EUR/PLN deals -73 pips at 4.2552 and familiar technical levels remain in play. Bears look for losses toward May 15 low of 4.2230 and bulls keep an eye on Apr 16/Dec 25 highs of 4.3102/4.3114. Market participants monitor the evolution of Sino-US trade tensions and their ramifications for global risk sentiment.
- NBP's Dąbrowski said that the MPC is still inclined to lower interest rates further, but he was not able to say if easing could resume already in November. In his view, the reference rate could drop to 3.50-4.00% next year.
- POLGBs have pared initial gains, yields now sit only marginally below neutral levels. The Finance Ministry is looking to sell PLN6bn-10bn worth of POLGBs at an auction today.
- The broad-based WIG Index has added 1.3% this morning. Blue-chip WIG20 is up by 1.6%, narrowing in on recent cyclical highs printed just shy of the 2,900 mark.
- Poland's CPI inflation for September was confirmed at +2.9% Y/Y, in line with the flash reading. Services inflation eased to +5.8% Y/Y, with goods inflation ticking higher to +1.9%.
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BUNDS: Looking to test the initial resistance
- The German Bund targets the initial small resistance noted at 128.84, not seen a clear new driver, and the move has mostly been gradual throughout the early trading session.
- In terms of flow, volumes are still on the lighter side and the fade off the highs in Equities has put some impetus in the EGB recovery off their respective lows.
- A clear break through 128.84 would open to the 129.13 gap next.
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COMMODITIES: Gold in a Clear Bull Cycle, Close to Recent Record Highs
The trend condition in WTI futures is unchanged - a bear cycle remains intact short-term gains are considered corrective. The pullback from the Sep 2 high highlights a possible recent reversal and the end of a corrective phase between Aug 13 - Sep 2. Initial resistance to watch is $66.03, the Sep 2 high. Key short-term resistance has been defined at $69.36, the Jul 30 high. A stronger resumption of weakness would open $57.71, the May 30 low. Gold remains in a clear bull cycle and continues to trade at its recent highs. The yellow metal traded to a fresh all-time high once again, last week. The break higher confirms a resumption of the primary uptrend and an extension of the sequence of higher highs and higher lows. The next objective is $3674.8, a Fibonacci projection. Initial firm support lies at $3504.1, the 20-day EMA.
- WTI Crude up $0.26 or +0.41% at $62.94
- Natural Gas up $0.02 or +0.82% at $2.964
- Gold spot up $1.54 or +0.04% at $3644.05
- Copper up $0.35 or +0.08% at $465.5
- Silver up $0.02 or +0.05% at $42.199
- Platinum up $3.49 or +0.25% at $1400.63
