POLAND: Speaker Expected To Step Down In Autumn, In Line With Coalition Pact
Mar-27 08:19
- Onet reported that Sejm Speaker Szymon Holownia told his coalition partners that he will step down in autumn, paving the way for New Left's Wlodzimierz Czarzasty to be elected to the post, in line with the coalition agreement. This runs counter to earlier speculation that Holownia could seek to renegotiate the coalition pact amid the recent fracture of the New Left. His decision to honour the earlier agreement will help stabilise the ruling coalition under the leadership of Prime Minister Donald Tusk's Civic Coalition (KO). Both the New Left and the Third Way (an alliance of Poland 2050 and PSL) have been struggling to leverage their positions as junior coalition partners amid general perception that they would be unwilling to participate in any alternative coalition. The growing dominance of KO in the governing camp may be reflected in the cabinet reshuffle expected after the upcoming presidential election, where KO candidate Rafal Trzaskowski remains a clear front-runner.
- According to unofficial information obtained by Business Insider, the Finance Ministry is working on a revamp of the capital gains tax (so-called "Belka tax"), with the aim of incentivising the reallocation of some of the savings currently parked in current accounts into capital markets, which would stimulate the economy.
- The Interior Ministry confirmed that the tightened regulations on asylum applications took effect yesterday. The government tweaked the rules in reaction to intensifying migration flows via Russia and Belarus seen as hybrid warfare tactics deployed by these countries.
- The Finance Ministry will offer PLN6bn-10bn worth of OK0127, PS0130, WZ0330, DS0432, DS1034 and WS0437 bonds at an auction today, up from PLN5bn-10bn in the preliminary issuance plan.
- NBP Governor Adam Glapinski will speak at the Banking Forum at 09:00GMT/10:00CET.
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GILT AUCTION PREVIEW: 1.125% Sep-35 I/L gilt auction
Feb-25 08:18
- The DMO will kick off issuance for the week this morning with the first reopening of the 10-year 1.125% Sep-35 linker for GBP1.6bln nominal (following its launch a month ago).
- The launch auction was for a smaller GBP1.5bln amount and saw a bid-to-cover of 3.12x.
- This linker replaced the 0.75% Nov-33 linker as the on-the-run 10-year issue. Auctions for that linker were strong with the lowest bid-to-cover in the five auctions so far this fiscal year at 2.89x (with a mean of 3.16x and 3.39x seen in the last auction in December). All of these auctions have been for GBP1.5bln nominal.
- We expect another strong linker auction.
- Timing: Results will be available shortly after the bidding window closes at 10:00GMT with a further GBP400mln available to successful bidders at the PAOF.
GILTS: Futures Pierce Resistance On Tariff Worries
Feb-25 08:16
Gilts rally at the open on tariff-driven worry, with reports pointing to wider EU countermeasures against U.S. tariffs and the U.S. pushing for tougher global restrictions surrounding Chinese semiconductor trade.
- Futures pierce initial resistance at the 50-day EMA (92.83), topping out at 92.91, before fading back to ~92.80 as the wider risk-off moves start to run out of momentum (equities off lows, DXY & T-Notes off highs)
- A fresh extension higher would expose the Feb 13 high (93.50) and reintroduce some momentum to the bullish technical cycle.
- Yields 2-3bp lower, light bull steepening.
- The DMO will come to market with GBP1.6bln of 1.125% Sep-35 I/L paper this morning.
- Elsewhere, we will get comments from BoE chief economist Pill, as he delivers closing remarks at the Bank’s BEAR conference.
EQUITIES: Big buying going through against the lower Equiy Cash open
Feb-25 08:15
- The Tech Index (SX8P) did gap lower on the Open, but the Estoxx futures (VGH5) is seeing BIG buyer on the Cash open, a 32 points bounce off the low, with over 20k lots going through in the past 5 minute window.
- VGH5 has fully recovered to trade back to flat on the Day.
