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Zloty Edges Lower, Mortgage Holiday Extension Chatter Takes Focus


EUR/PLN has crept higher and last deals at PLN4.7158, up 30 pips on the session, with familiar technical targets still in play. As a reminder, a clearance of Jan 19 high of PLN4.7453 would bring Nov 16 high of PLN4.7848 into view.

  • POLGBs have strengthened and last trade 7.1-9.9bp firmer across the curve, with benchmark 10-year yield printing one-week lows. The 2-year/10-year bit of the curve has moved deeper into inverted territory. The spread in yields on 10-year POLGBs and 10-year Bunds has narrowed a tad.
  • WIG20 has remained heavy as government spokesman Piotr Muller said that the potential extension of mortgage payment holidays will depend in the level of interest rates, with the final decision coming up around mid-year.
  • NBP's Ludwik Kotecki said that reports on the idea of mortgage holiday extension were "surprising" and signal the government's scepticism about the strength of imminent disinflation. He said the central bank is unlikely to raise interest rates this year, but any talk of cuts at this point would be premature.
  • Poland's unemployment rose to 5.2% in December, with the number of jobless people up by 12.1k to 0.81mn. The labour market remains tight, with the unemployment rate close to multi-decade lows.

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