Overnight Implied Volatility Soars Ahead Of NBP Rate Decision

EUR/PLN extends its streak of gains to three consecutive days in the lead-up to the NBP rate decision today. The rate last deals at 4.6363, up 58 pips on the session, with bulls targeting a familiar 4.6971/4.7000/4.7072 resistance zone. Bears eye the 20-EMA at 4.6068 for initial support.

• PLN/EUR 1-year basis swaps have remained on a downward trajectory since government officials warned that they could tighten zloty liquidity to shore up the currency if needed. Swaps last sit at 128bp, the lowest level since before the NBP's previous monetary policy decision, which triggered a dramatic PLN sell-off.
• EUR/PLN overnight implied volatility shot higher this morning, peaking at 14.60% (highest point since Oct 20, 2022) and last seen at 14.54%, ahead of today's highly uncertain NBP monetary policy decision. Most analysts expect the central bank to deliver further monetary easing.
• The WIG20 Index remains under pressure, last operating ~0.3% lower on the day. The WIGBANK Index has recouped most of its earlier losses, but still sits ~0.3% lower on the session.
• The NBP may announce its rate decision at any point this afternoon, with the statement due to follow shortly after. Governor Adam Glapinski will hold his press conference tomorrow.