PLN: Zloty On Defensive Amid Russia Concerns

Risk-off flows surrounding an update to the Russian nuclear doctrine have lent support to EUR/PLN, with the zloty particularly exposed to regional security concerns. The pair last deals at 4.3335, up 203 pips on the day, with bulls seeking gains beyond Nov 6 high of 4.3758 followed by Jun 14 high of 4.3826. Bears keep an eye on Nov 7 low of 4.3089, followed by Oct 14 low of 4.2867.

• NBP's Henryk Wnorowski told Radio Bialystok that "the vast majority of MPC members point to march as the first month when reductions can be responsibly discussed, if a few favourable developments happen along the way." This comes after relatively cautious comments from Ireneusz Dabrowski "the most likely scenario is that a rate cut discussion would take place only in the third quarter") and Gabriela Maslowska ("more likely it'll be second half of the year") that were doing the rounds in recent days.
• The government unveiled plans to freeze the maximum electricity price for households at PLN500/MWh next year at a total cost of around PLN5bn. The project will be discussed at today's cabinet meeting. Millennium Bank noted that such measures could translate into a lower inflation path, bringing rate cuts forward.
• POLGBs have given away the bulk of their initial gains but yields still sit 3.6-6.7bp lower across the curve, with a degree of steepening evident.
• The WIG20 Index is hitting new cyclical lows, shedding 1.2% this morning.