Currencies: Economists: the ECB has done more than the market expected – Virtual Poland

Currencies: Economists: the ECB has done more than the market expected – Virtual Poland

announced on Thursday by the European Central Bank asset purchase program worth € 1 trillion sparked enthusiasm in the markets as investors expected a modest gesture ECB – pointed economists. They added that it will benefit the Polish economy.

During Thursday’s meeting the Governing Council of the European Central Bank (ECB) announced asset purchase program worth 60 billion euros a month. Previously indicated that interest rates in the euro area will not change.

The program, which is due to start in March 2015. Will last until the end of September 2016. Will be worth 1 trillion euros.

“Today’s news from the European Central Bank have had a positive surprise, both in terms of the value of the asset purchase program, as well as the bank’s determination to restore inflation to the target level” – estimated in an interview with PAP senior economist at BofA Merrill Lynch Raffaella Tenconi.

“The ECB’s decision will have a positive impact on economic growth in Poland, both because of the Polish trade relations with the countries of the euro zone and the general improvement in market sentiment,” – she added.

In its assessment of the European bank’s decision should not affect the expected interest rate cut in Poland. “Today’s settlement should not be applied to reduce the NBP interest rates by 50 basis points, expected in the coming months,” – she said.

On the other hand, the chief economist at Societe Genaral Jaroslaw Janecki told PAP that the market reaction to the decision of the ECB – the strengthening of the zloty and lower yields of Polish bonds – no surprise.

“This is a reaction similar to that with which we are dealing with, when the Fed announced its quantitative easing program. Strengthening our currency and bond yield decline is likely due to the expectation that additional money will appear on our domestic debt market public within the investment portfolio. These expectations are becoming more visible from the speeches of President Draghi “- said Janecki.

The Economist noted that optimism prevailed also on stock exchanges in both Polish and region. In his view, the reaction of the markets should be continued, and on Friday we will not see a return to previous levels. “Rather, we should have to deal with the gradual strengthening of the trends that we see today. Gold should not stop at the level of 4.25 against the euro. From my point of view is rather resistance level of 4.20″ – rated.

Janecki added that it is also possible further weakening of the euro against the Swiss franc towards 0.96. As for the currency pair CHF / PLN, it will largely depend on the scale of the appreciation of the zloty against the euro.

The Brokerage House analyst Kamil mBank Maliszewski estimates that the next day should bring further declines in the pair EUR / PLN towards 4.25. “In relation to the Swiss franc, the Polish currency behaved quite calmly and gives the hope that the peaks of the last days in the neighborhood of 4.40 will not be overcome, and the next week will bring a slow return CHF / PLN towards 4.20″ – said Maliszewski.

“In relation to the US dollar dollar is in the vicinity of 3.70 and the next few days are likely to bring further its strengthening. Especially that the downward pressure on the EUR / USD remains fairly moderate, considering the importance of today’s decision ECB “- rated.

Analyst X-Trade Brokers Stasik Jacob said that although the market expected the asset purchase program start, it’s not up on such a scale. “Nobody expected that a gun brought before it by ECB President Mario Draghi will be so large caliber. The total value of the purchase amount to almost 1.3 billion euros. Much more than expected by the market” – pointed.

He explained that the reason for taking such a decision, the European market was getting lower inflation in the euro area. “You have to remember, however, that the ECB’s actions do not lead immediately to a faster increase in prices. Moreover, the effect is not unique,” – noted analyst XTB.

Stasik estimated that Thursday’s ECB decision changes the rules of the game in the euro area. “We certainly have to fall in profitability of debt in Europe. The ECB has done more than the market expected,” – he said.