PLN: Zloty Trades Flat, Poland Holds Bond Auction

EUR/PLN struggles for a clear direction, last operating at 4.2790, in close proximity to neutral levels. The area around 4.25 provides a key layer of support for the rate, with bears setting their sights on 4.2471, which limited losses on May 28 and then on Jul 15. Bulls look for a rebound towards Jul 2 high of 4.3321.

• ING expect EUR/PLN to approach 4.25 over the next week or two, due to strong fundamentals and hawkish NBP policy, but they continue to flag geopolitical risks posed by the US presidential election. Pekao also flag 4.25 as an important support level for EUR/PLN, which should attract the pair in the coming days.
• POLGB yields are mostly a tad higher across the curve, save for 5s. The Finance Ministry sold PLN10bn of bonds (upper end of the target), attracting demand for PLN12.4bn. Bond types on offer included OK0426, DS0727, PS0729, WZ1129, DS0432, DS1034 and IZ0836. 
• Poland's unemployment rate fell to 4.9% in June, reaching the lowest level in decades, which was in line with the consensus forecast and preliminary data provided by the Ministry of Family, Labour and Social Policy.