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2Y10Y Yield Continues To Crater In June

POLAND
  • Poland 2Y10Y yield curve continues to crater this month, currently pricing in a significant deceleration in the economic activity in the months to come.
  • This chart shows that the 2Y10Y yield curve has strongly led the industrial production (proxy for economic activity) by 6 months in the past two decades.
  • Hence, elevated inflationary pressures combined with the surge in recession risks have led to a plunge in consumer confidence indicator, which fell to an all time low in June.
  • As a result, the current macro outlook should continue to maintain implied vol elevated in risky assets in the near to medium term.
  • WIG20 Index has been retracing higher this week after finding support at the 1,652 level on Friday; ST resistance to watch on the topside stands at 1,804.50 (50DMA). On the downside, support to watch below 1,652 stands at 1,600.

Source: Bloomberg/MNI

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  • Poland 2Y10Y yield curve continues to crater this month, currently pricing in a significant deceleration in the economic activity in the months to come.
  • This chart shows that the 2Y10Y yield curve has strongly led the industrial production (proxy for economic activity) by 6 months in the past two decades.
  • Hence, elevated inflationary pressures combined with the surge in recession risks have led to a plunge in consumer confidence indicator, which fell to an all time low in June.
  • As a result, the current macro outlook should continue to maintain implied vol elevated in risky assets in the near to medium term.
  • WIG20 Index has been retracing higher this week after finding support at the 1,652 level on Friday; ST resistance to watch on the topside stands at 1,804.50 (50DMA). On the downside, support to watch below 1,652 stands at 1,600.

Source: Bloomberg/MNI