PLN: Zloty Under Pressure Following Latest Comments From NBP Governor

The European morning brought another round of EUR/PLN purchases, possibly as local traders returned to desks and parsed yesterday's comments from NBP Governor Glapinski. The pair posted a leg higher Tuesday afternoon as the official signalled that the anticipated debate on rate cuts could commence before 2026.

• Glapinski's comments came after a non-decision MPC meeting, which may have prompted him to soften the earlier ultra-hawkish forward guidance. Most MPC members have publicly indicated that condictions may be ripe to discuss rate cuts at some point next year.
• The zloty ticked lower after the release of Polish activity data. Industrial output missed expectations despite the positive calendar effect (+2 working days Y/Y), while wage growth (a key source of concern for the NBP) slowed a tad more than expected to +10.6% Y/Y.
• EUR/PLN last deals at 4.2876, up 106 pips on the session. Bulls look for a swing past the round figure of 4.30 and towards Aug 9/Jul 2 highs of 4.3309/21. Bears see the 4.25 area as their key target, with the focus falling on 4.2471, which limited losses on May 28/Jul 15.
• POLGB yields are lower across the curve, with 5s outperforming. The Finance Ministry is looking to sell PLN5bn-9bn worth of government bonds at an auction today.
• The WIG20 Index has found support in its 200-DMA again after bouncing off that moving average a few days back. The index has added 0.7% this morning.