Polish Yields Fall to Two-Week Low as Output Poised to Contract

Polish bond yields fell before a report that may show a contraction in industrial output extended last month, backing the case for interest rate cuts.

The yield on five-year notes slid to a two-week low as output slumped 3 percent from a year earlier, according to the median forecast in a Bloomberg survey of 26 economists. Data is scheduled for release at 2 p.m. Poland’s central bank has slashed rates four times since November to stimulate the economy.

“We are not looking for a positive surprise,” Bank Pekao SA economists including Marcin Mrowiec said in e-mailed report. “The yield curve is pricing in an economic slowdown and a possible reaction from the central bank.”

The yield on notes maturing in April 2018 fell four basis points, or 0.04 percentage point, to 3.515 percent at 1:05 p.m. in Warsaw, its lowest level since Feb. 6. The zloty gained 0.1 percent to 4.1809 per euro, its second day of advances.

To contact the reporter on this story: Piotr Skolimowski in Warsaw at pskolimowski@bloomberg.net

To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net

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