USD/PLN Breaches Round Figure, NBP Speak Takes Focus

EUR/PLN has lost some ground and last trades -40 pips at 4.4379, with bears taking aim at Jul 4 low of 4.4138. The 50-EMA provides the initial bullish target at 4.4898. The moves in EUR/PLN have been limited relative to USD/PLN, which broke below the psychological barrier of 4.00 yesterday for the first time since Russia's invasion of Ukraine in February 2022. The rate last sits at 3.9726, sinking deeper below the 4.00 mark.

• POLGBs have turned bid again, with yields sitting 11.3-13.4bp lower, as curve steepens at the margin. Polish FRAs have extended their recent losses, printing new cyclical lows. Their latest downleg can be traced back to the NBP presser last week, which inspired dovish adjustments even as the market had already been pricing a decent amount of monetary easing in Poland. In addition, yesterday's below-forecast US CPI data likely keep reverberating across local interest-rate markets.
• NBP speak provided the main point of interest locally over the past 24h. Cezary Kochalski said that there may be scope for discussing rate cuts after the summer at the earliest. His colleague Henryk Wnorowski said that single-digit inflation is just one factor watched by the MPC and suggested that other signals are needed to justify cutting rates. The tone of both interviews was less dovish than last week's press conference with NBP Governor Adam Glapinski.
• There was nothing of real note in Governor Glapinski's parliamentary testimony last night. The official added nothing new to his familiar rhetoric, while defending the central bank's monetary policy approach.