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Zloty Back In Negative Territory, POLGB Yields Trim Gains


EUR/PLN has returned to positive territory and last trades +31 pips at PLN4.7191. Should renewed bullish momentum take the pair above earlier intraday highs (PLN4.7453), topside focus would turn to Nov 16 high of PLN4.7848.

  • POLGB yields remain higher on the session, despite trimming some of their initial gains. Finance Minister Rzeczkowska told Bloomberg that Poland is looking to offer bonds in USD and EUR this year, as well as "maybe" in JPY "but we will see." This would mark Poland's return to the Samurai bond market after a decade-long hiatus.
  • A mixed consumer confidence report failed to give the Zloty any fresh impetus. The main index improved more than forecast, but it remains at historically depressed levels, sitting at levels last seen when the COVID-19 pandemic broke out in 2020. On the bright side, inflation expectations eased this month. Recent communications from the central bank and government officials have emphasised that price growth will likely moderate after a temporary spike in Q1.
  • The breakdown of votes from the NBP's December monetary policy review provided no surprises, with the ten-member MPC rejecting three motions to raise interest rates. Przemyslaw Litwiniuk was the only policymaker to back a 25bp hike, Ludwik Kotecki and Joanna Tyrowicz voted for a 50bp increase, while Tyrowicz alone voted in favour of a 100bp rate rise.

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