Core CPI Matches Expectations, Poland's Chase After EU Funds Continues

EUR/PLN has traded with a bearish bias in European hours and last sits at PLN4.6918, down 18 pips on the session. Familiar technical picture remains in play.

• POLGBs have recouped their earlier losses, with bull-steepening impetus now evident in the yield curve. The 2-year/10-year spread consolidates in positive territory, while 10-year POLGB/Bund yield spread has now erased its widening from earlier in the day.
• The NBP said that core inflation quickened to +11.5% Y/Y in December, printing in line with BBG consensus forecast (+0.6% M/M vs. +0.5% expected). Core inflation has been quickening despite recent moderation in headline price growth.
• A DGP report on Poland's push for EU recovery funds is gaining some broader traction. The newspaper flagged that the government will likely apply for the transfer of funds before the key court bill is signed into law in order to create pressure on the Senate and President to approve the legislation.