Zloty Comes Under Pressure, Dovish NBP Talk Draws Attention

EUR/PLN has advanced today as the zloty lags all its EMEA peers, as the dust settles after yesterday's round of dovish NBP repricing. The pair last changes hands +204 pips at PLN4.5471, with bulls taking aim at May 18 high of PLN4.5547. On the flip side, bears keep an eye on the PLN4.4784/67 support area.

• Below-forecast flash CPI readings and the structure of final Q1 GDP data tilted NBP rate expectations in the dovish direction, which was supported by continued flow of comments from MPC officials, who flagged potential for cutting rates by the end of this year.
• MPC's Henryk Wnorowski, a relative moderate in the dovish camp, said that he could "consider discussing rate cuts with inflation in single digits [which may already be achieved in August] and an optimistic projection in July." Iwona Duda later agreed that the NBP could mull cutting rates based on data and the July projection.
• POLGB yields sit 0.9-2.5bp lower across the curve, reversing their initial moves. The Finance Minstry said it will hold two POLGB auctions this month, on June 16 (PLN3-7bn) and June 28 (PLN4-7bn), and doesn't plan any switch auctions.
• Poland's S&P Global Manufacturing PMI unexpectedly improved to 47.0 in May, with the survey showing that firms "cut their own prices at the fastest rate since the series began."