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Geopolitical Uncertainty Leaves PLN and Risky Assets Vulnerable in ST

POLAND
  • Poland called on the EU to impose a special duty mechanism on Russian gas and oil imported to EU so that Russia won’t be able to find new markets (BBG).
  • The cut in gas deliveries to Poland this week triggered a spike in volatility on risky assets and the PLN.
  • USDPLN broke above its 4.40 resistance on Tuesday and is currently trading at around 4.45; next ST resistance to watch on the topside stands at 4.5280. On the downside, support to watch below 4.40 stands at 4.3210.
  • Polish equities have also been sold aggressively following the news; WIG20 index is down over 10% this month and down nearly 25% since its high reached in October 2021. Key support to watch on the downside stands at 1,781, which was the low reached in February.
  • Yesterday, NBP member Kochalski mentioned in an interview that he sees room for more rate hikes and ‘cannot rule out’ another 1ppt as we saw in April.

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