Market overview
In a surprise move, the ECB cut policy rates in September
The first US rate hike is drawing closer
Interest rate hedging
The outlook for the US economy is improving and US long yields have stopped falling
We recommend hedging rates across the USD curve, as well as overweighting liability duration
FX hedging
The PLN, HUF and CZK are exposed to deflation and are set to weaken over the coming months
Companies w ith PLN-, HUF- or CZK-denominated income should hedge FX risk via forwards
We recommend hedging HUF- and CZK-denominated expenses via forward extras while hedging PLN-denominated expenses via risk reversals
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