PLN: Zloty Holds Steady Amid Reflections On NBP Rate Outlook

EUR/PLN is little changed at 4.2815, with the pair looking for fresh catalysts. A familiar technical picture remains in play: bulls look for gains towards Aug 9/Jul 2 highs of 4.3309/21, while bears seek a move towards the 4.25 area.

• Judging by sell-side notes circulated over the past 24 hours, there is a sense that the latest round of economic activity data released out of Poland coupled with less hawkish rhetoric from the NBP Governor amount to a slightly more dovish picture. This may have applied some pressure to local rates and the zloty.
• Data published by Statistics Poland showed that industrial output and retail sales were softer than expected in July, while Poland's double-digit wage growth moderated slightly more than forecast. Overall, the date were weaker than anticipated, lending some support to calls for rate cuts next year.
• This sentiment may have fed into yesterday's strong debt auction. The Finance Ministry sold PLN9bn worth of POLGBs at yesterday's auction, attracting demand for PLN18.5bn, with a further PLN1.3bn sold at a top-up auction. According to Bloomberg, the auction witnessed the highest bid/cover ratio in at least two years.
• That being said, POLGB yields have ticked higher this morning, possibly taking their cue from core markets.