Zloty Extends Gains, Focus Remains On Core Central Banks

EUR/PLN loses altitude for the fourth consecutive day, last dealing at 4.4169, down 69 pips on the day. Bears set their sights on 4.4138, which limited losses on Jul 4. Further below, technical focus falls on the 4.40 figure. On the flip side, bulls look for a recovery towards the 50-EMA, which kicks in at 4.4746.

• POLGB yields are marginally higher across the curve. mBank issued a recommendation noting that they are exiting their long position in 10-year POLGBs as "the yields on Polish debt were falling dynamically for over a month, but this trend has recently stopped. In the meantime, the market has already priced a fairly aggressive monetary easing cycle, while the period of fast and easy disinflation has probably ended."
• The Korea Times reported that Poland requested over KRW20tn ($15.6bn) in financial loans from South Korean export credit agencies (ECAs) to fund purchases of Korean-produced military equipment. Santander flags that this implies a proportionally smaller need to finance military spending by bond issuance.
• The focus turns to the ECB monetary policy decision after the Fed raised interest rates by the expected 25bp yesterday.