Zloty Finds Poise Despite Domestic Negatives

EUR/PLN has weakened further. The pair deals at PLN4.7118, down 77 pips on the session. The key downside technical target is located at Feb 2 low of PLN4.6787 and a break here would reinstate the bearish theme.

• POLGBs have clawed back most of their initial losses, while 10-year POLGB/Bund yield differential is back below the 400bp mark. The WIG20 index has added ~0.7% but is yet to test the prior day's best levels.
• Poland's main banking lobby group warned that the domestic mortgage market may shrink by a third this year to the lowest level since 2005 as the economic slowdown reduces households' capacity to repay debts, while the sector faces legal challenges.
• Latest rhetoric from President Duda on court law needed to unlock access to EU recovery funds suggested that he is in no rush to facilitate the adoption of the reforms, as he accused the European Commission of interfering in Poland's internal affairs.