EUR/PLN Attacks 4.30, Fails To Consolidate Below There

The 4.30 level came under attack amid widespread talk of an imminent move towards the figure among local sell-side desks, with the market absorbing positive news on EU aid for Poland. However, EUR/PLN failed to stay below that level and recovered to 4.3063 where it sits at typing. Alior Bank wrote this morning that PLN moves at the start to the week suggest that the news re: EU aid has already been discounted to some degree.

• PKO economists wrote that their analysis failed to demonstrate any significant negative impact of PLN appreciation on the profitability of Polish firms with 50+ employees. They argue that the expected zloty strengthening is unlikely to affect the long-term competitiveness of Polish economy, as long as it is consistent with continued rapid economic growth, albeit it may hurt firms and sectors which fail to hedge against FX risk to a sufficient extent.
• Technically, a clean break below 4.30 would draw attention to 4.2935, which limited losses on Dec 13. On the flip side, a break above Feb 7 high of 4.3564 would signal potential for a stronger bullish correction.
• POLGB yields have ticked lower, in line with the impulse from core FI. The Finance Ministry will offer PLN6-9bn of OK0426, WS0429, DS1029, WZ1129 and DS1033 bonds at an auction today.
• The domestic political agenda remains broadly unchanged, with fresh reports on the expected probe into NBP Governor Glapinski under close scrutiny.