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Falling Forward Rates Keep Pushing Down LT Bond Yields

POLAND
  • Even though inflationary pressures remain elevated in the CEE region with some sell-side firms estimating that CPI inflation may remain at or above 5 % at year-end, LT bond yields have been falling in Poland.
  • The 10Y yield broke below its 100DMA on Friday and is currently testing its 1.50% support, which corresponds to the low of the downward trending channel.
  • Next level to watch on the downside stands at 1.45% (200DMA).
  • The rise in uncertainty over the Delta variant combined with the deceleration in the Chinese economic activity have increased preference for safe 'assets' such as government bonds.
  • Poland 10Y bond has now erased all of its May losses.

Source: Bloomberg/MNI

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