Zloty Firms Ahead Of NBP Press Conference

EUR/PLN has inched lower and last deals at 4.3394, down 92 pips on the session. Bears see Dec 13 low of 4.2935 and Mar 4, 2020 low of 4.2870 as their initial targets. Conversely, bulls look for a rebound above the 50-EMA at 4.3698.

• The focus turns to a press conference with NBP Governor Adam Glapinski due to start at 14:00GMT/15:00CET. The Governor departed from the earlier format of media briefings in December, as he refrained from his usual digressions and politically loaded comments, sticking with textbook language and discussion of data instead. It remains to be seen if this will be the case today.
• This comes after the MPC left interest rates unchanged for the third consecutive time yesterday, citing uncertainty around fiscal and regulatory policy. Several sell-side analysts (see our earlier summary) suggested that the central bank could leave interest rates on hold for longer amid inflationary risks ahead.
• PLN 9x12 FRAs trade ~130bp below 3-Month WIBOR (today's fixing at 5.88%) and 12x15 FRAs trade ~166bp shy of that benchmark rate, with FRAs remaining under pressure. This contrasts with more cautious, hawkish comments circulated by local sell-side desks over the past 24h.
• There has been little impact from the ongoing political turmoil in Poland on local financial markets. Finance Minister Domanski told Bloomberg that the passage of the 2024 budget bill is not at risk and the political conflict over the arrest of two former officials is unlikely to affect the PLN and POLGB yields.