Zloty Edges Higher, Future Of Anti-Inflationary Measures Under Scrutiny

EUR/PLN changes hands at 4.3646, down 51 pips on the session, with bears looking for a breach of Jan 22 low of 4.3447. Conversely, bulls see Jan 17 high of 4.4124 as their initial target. USD/PLN consolidates above the psychologically significant 4.00 level, despite today's downtick.

• Minister Paulina Henig-Kloska hinted that the government will implement a gradual phase-out of the current freezes of electricity, gas and heat prices in 2H2024, seeking to avoid a shock from any abrupt action. The details of proposed protective measures will be unveiled in the coming months. During his most recent press conference, NBP Governor Glapinski emphasised that the new government's regulatory and fiscal decisions will be a key determinant of the inflation path.
• Yesterday's POLGB auction was slightly weaker than the first two offerings this year, which turned out rather strong. The Finance Ministry sold PLN7bn of bonds, attracting demand for PLN10.9bn. Still, Alior Bank commented that the results do not indicate any problems with the absorption of POLGBs by the market, despite higher borrowing needs this year.
• POLGB yield curve runs slightly steeper this morning, trading up to 1.9bp richer as we type. The WIG20 Index has added 0.4%