Local Sell-Side Desks See Little Scope For PLN Volatility

ING write this morning that a key risk for the zloty will be tomorrow's MPB meeting, which they expect to result in an interest-rate cut and forward guidance pointing to further easing. However, they believe that such a scenario is already priced in and should not trigger any major PLN sell-off. They think that EUR/PLN will struggle to break above the 4.48 area, while the odds of a return above 4.50 are slim unless we see firmer USD appreciation.

• Millennium Bank write that POLGB price action may be more interesting than FX moves in the coming days, with all eyes on the MPC rate decision (Wednesday) and the expected fresh election campaign pledges. They expect the sideways trend in EUR/PLN to continue this week and believe that Governor Glapinski's press conference may generate less volatility than the previous ones, given that the market is already convinced about the imminence of monetary easing.
• Alior Bank note that EUR/PLN has been in consolidation phase for the past two weeks, oscillating within the 4.45-4.48 corridor. They think that today's session will all be about waiting for the NBP decision and any spillovers from core markets.