Polish markets may move Friday on expectation that Moody’s, a rating agency will downgrade the economy on worries about fiscal expansion and institutional changes. Polish zloty is expected to witness the most movement on such an incidence.
"In our view, a downgrade can be expected, because Moody’s still rate Poland two notches above S&P (A2 or A as opposed to BBB+)," KBC said in a research note.
Further, the research bureau aligns that a downgrade from A2 to A3 may already be incorporated. Hence, unless further downgrade is witnessed, downside risks to zloty and Polish government bonds are limited with upward bias.
