Zloty Edges Higher, Looks Through Domestic Politics

EUR/PLN has inched lower and last deals at 4.3412, down 35 pips on the day, while POLGB curve has bull steepened at the margin. Bears look for a dip through Dec 14, 2023 low of 4.2942 and Mar 4, 2020 low of 4.2870. Conversely, a clean break above the 20-EMA at 4.3422 would open up the 50-EMA at 4.3905.

• Local headline flow is dominated by the overhaul of public media by the new government. Facing the prospect of coexisting with public media turned into a mouthpiece of the former ruling party at least for another year and a half, the coalition decided to use the nuclear option and revamp the state-owned TV, radio and newswire on shaky legal grounds. The chaos is amplified by a confusing legal environment left by the previous administration, whose many reforms continue to be contested in courts.
• Elsewhere, the focus falls on the parliamentary debate on the amended 2024 budget bill, with the new government boosting the projected budget deficit to PLN184bn from PLN165bn.
• Poland's retail sales and construction output were weaker than expected, which came after yesterday's round of soft data. The post-election normalisation of fuel prices resulted in a sharp decline in fuel sales, while adverse weather conditions may have affected construction works.