POLAND: Def Min "Hybrid Actions" Possible After Likely Russian Drone Crash
Aug-20 09:39
Minister of National Defence Wladyslaw Kosiniak-Kamysz has stated that the object that fell from the sky and exploded in the village of Osiny in the Lublin Voivodeship that runs along the Ukrainian border is "most likely" a drone. Speaking to reporters, the minister said, "At this point, every scenario must be considered. We're most likely talking about a drone that crashed. It doesn't yet bear any signs of military nature."
- As MNI noted earlier this morning (see 'POLAND: Finance Ministry Denies Working On 2025 Budget Revision', 08:19BST), an unidentified object fell into a field overnight and exploded. Initial reports claim, "The blast shattered some windows in nearby houses but there were no casualties. Sources told PAP news agency that there were no recorded violations of Polish airspace from Ukraine or Belarus..."
- Rzeczpospolita reports that, according to its unofficial findings, the object "may have been an Iranian unmanned aerial vehicle, either the Shahed 131 or 136..." These drones are used by Russia in attacks on Ukrainian troops, infrastructure, and civilians.
- Kosiniak-Jamysz added that "Hybrid actions, provocative towards the Polish state, should not be ruled out." The minister said Poland is in contact with Romanian authorities, where Russian drone incursions and crashes have been more commonplace, to gain any relevant information.
- Several missiles and drones from both Russian and Ukrainian forces have crashed on Polish territory/entered its airspace during the war, resulting in two fatalities. Given the extremely high military tensions along NATO's eastern flank, each incursion risks an escalatory response that could imperil regional security.
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STIR: J.P.Morgan Recommend Tactical GBP Forward Curve Flattener
Jul-21 09:32
J.P.Morgan recommended tactical fronts/reds SONIA curve flatteners (3Mx1Y/15Mx1Y) late on Friday.
- This recommendation is based on “RV dislocation (1Y/1Yx1Y SONIA now looks 6bp too steep on a relative basis vs. 1Yx1Y SONIA)” and their view that last week’s data “doesn’t warrant the BoE shifting to a faster easing pace than the current quarterly pace”.
GERMAN T-BILL AUCTION RESULTS: 3/9-month bubills
Jul-21 09:32
| Type | 3-month Bubill | 9-month Bubill |
| Maturity | Oct 15, 2025 | Apr 15, 2026 |
| Allotted | E1.9bln | E2.495bln |
| Previous | E1.739bln | E2.4bln |
| Total sold | E2bln | E3bln |
| Target | E2bln | E3bln |
| Avg yield | 1.799% | 1.806% |
| Previous | 1.834% | 1.816% |
| Bid-to-cover | 1.73x | 1.68x |
| Previous | 3.06x | 1.28x |
| Bid-to-offer | 1.64x | 1.39x |
| Previous | 2.66x | 1.02x |
| Previous date | Jun 23, 2025 | Jun 23, 2025 |
FOREX: JPY Firmer Despite Ishiba's Weaker Standing
Jul-21 09:27
- JPY outperforms headed into the NY crossover, with USD/JPY gapping lower at the open in response to the ruling coalition losing its upper house majority. Focus will be on whether Ishiba is able to stay in the PM role - while recent LDP PMs that lost their upper house majority have failed to hold office for much longer than two months - the split nature of the opposition means any stable alternative against Ishiba's leadership is unlikely for now.
- An uptick in volumes was responsible for a bid in GBP; with GBP futures seeing near 1,200 contracts trade inside three minutes (cash equivalent of over $90mln) for the best volumes of the session so far. This adds to the evidence that markets are building a base at the mid-July pullback lows of 1.3365 after last week's data which - while not ruling out an August BoE rate cut - has dented the pricing for sequential cuts later this year.
- NOK/SEK trades softer, with NOK among the poorest performers on the day. Softer crude oil prices are largely responsible and keep the recent rally highs of 11.9862 in EUR/NOK in focus for now.
- Datapoints are few and far between Monday and, with the Fed inside their pre-decision media blackout period, central bank speak is seen quieter also. Market interest picks up toward the tail end of the week, however, with prelim PMI data for July due Thursday as well as the ECB rate decision.
