POLAND: Could See First CHF Bond in a Decade as Rates Look Attractive
- The finance ministry are considering issuing their first CHF bond since the break-out of the FX-linked mortgage scandal 10 years ago (last was issued in 2015), according to the head of Poland's debt department Czarnecki. Czarnecki said it was was weighing up a CHF bond given the potentially lower borrowing costs in the country, however the plans are in the early stages and they provided no indication of the size of any issuance.
- Any CHF issuance would likely have to wait until next year, at which point Swiss rates could well be negative. Czarnecki also repeated that they would not issue in USD until next year, and would also avoid spooking markets. A roadshow is due for later this year, where Poland will prep markets for a JPY bond.
- A Parkiet survey shows that while inflation is falling, consumers have no intention to cut back on spending. They write that the slip in CPI to 4% is encouraging people to spend and is reducing interest in term deposits.
- Consumer confidence data is due today. Markets expect a minor improvement to -14.3 from -14.5.
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EURJPY TECHS: Monitoring Support At The 50-Day EMA
- RES 4: 166.69 High Oct 31 2024 and a key resistance
- RES 3: 166.10 High Nov 6
- RES 2: 165.21/43 High May 13 / High Nov 8 2024
- RES 1: 164.07 High May 15
- PRICE: 162.50 @ 07:14 GMT May 19
- SUP 1: 162.23/15 50-day EMA / Intraday low
- SUP 2: 161.60 Low May 6
- SUP 3: 160.99 Low Apr 22
- SUP 4: 159.48 Low Apr 9
EURJPY maintains a bearish tone following the pullback from its recent high. The move down is for now, considered corrective. However, the cross is testing a key support at 162.23, the 50-day EMA. A break of this level would undermine a bearish theme and signal scope for a deeper retracement. For bulls, a resumption of gains would refocus attention on key resistance and the bull trigger at 165.21, the May 13 high.
GILT TECHS: (M5) Resistance Remains Intact
- RES 4: 93.59 High May 8
- RES 3: 93.00 Round number resistance
- RES 2: 92.28 20-day EMA
- RES 1: 92.03 High May 16
- PRICE: 91.73 @ Close May 16
- SUP 1: 90.96 Low May 15 and the bear trigger
- SUP 2: 90.92 76.4% retracement of the Apr 9 - May 2 rally
- SUP 3: 90.47 Low Apr 11
- SUP 4: 89.99 Low Apr 9 and a key support
Gilt futures traded sharply lower last Wednesday, extending the current bear cycle. The impulsive sell-off strengthens a bearish theme. The move down exposes 90.92, 76.4% of the Apr 9 - May 2 rally. A break of this level would strengthen the bearish condition and open 90.47, the Apr 11 low. Note that the strong rally from last Thursday’s low does ease bearish pressure. Resistance to watch is at 92.28, the 20-day EMA. A break would be bullish.
RATINGS: U.S. Lost Aaa Status at Moody’s on Friday, Some Tweaks Elsewhere
Sovereign rating reviews of note from after hours on Friday include:
- Fitch affirmed Greece at BBB-, Outlook revised to Positive
- Fitch affirmed Slovakia at A-; Outlook Stable
- Moody's downgraded the United States of America to Aa1 from Aaa, outlook changed to stable
- S&P affirmed South Africa at BB-; Outlook Positive
- Morningstar DBRS confirmed the United Kingdom at AA, Stable Trend
- Scope upgraded Slovenia to A+, Outlook Stable
