Polish Assets Unwind Post-CJEU Moves, Zloty Cuts Losses

EUR/PLN has moved away from session highs, trimming gains registered on the back of a legal double-whammy delivered to the Polish banking sector. The EU's top court ruled that consumers can skip interest payments on annulled CHF mortgage loans deemed unfair by Polish courts (case C-520/21); and that Polish courts cannot refuse a suspension of mortgage payments until a dispute over potentially abusive clauses is settled (case C-287/22).

• EUR/PLN trades at PLN4.4602, almost 100 pips above neutral levels, with the rate struggling to test yesterday's extremes as it remains trapped in a familiar range. The rate topped out at PLN4.4777 earlier in the session.
• Looking at other crosses, CHF/PLN rose to PLN4.5852 before easing off and last deals at PLN4.5636, up 36 pips on the day; USD/PLN operates at PLN4.0975, down 116 pips on the session.
• POLGBs have unwound much of their earlier losses, yields last sit just 0.8-5.5bp higher across the curve. The Finance Ministry will auction PLN4-6bn worth of local-currency bonds maturing in Oct '25, Jul '28, Nov '28, Oct '30 and Oct '33 tomorrow.
• The WIGBANK Index tracking shares of local lenders took a hit following the announcement of CJEU verdicts, but has now clawed back those losses. Moreover, it has consistently outperformed benchmark WIG20 Index this year.