Zloty Garners Strength On Eve Of NBP Rate Decision

EUR/PLN last changes hands at PLN4.6975, down 125 pips on the day, with the Zloty sitting near the top of the EMEA scoreboard. The initial technical target on the downside is Nov 30 low of PLN4.6595, followed by Aug 15 low of PLN4.6528. Conversely, bulls look for a clean break above the 200-DMA (PLN4.7118) briefly pierced today. This would expose Nov 16 high of PLN4.7848.

• Unanimous consensus calls for no change to monetary policy settings at the NBP's meeting tomorrow, with a growing number of analysts noting that we may have reached an interest-rate plateau. The spread between 3-Month WIBOR vs PLN FRA 12x15 is in negative territory, suggesting that the market expects rate cuts to begin in 2023.
• Poland's government bond yields have eased off and the curve runs steeper. Benchmark 10-year yield continues to operate near cyclical lows, despite yesterday's bounce.
• WIG20 has shed ~0.7% so far. Czechia's' PX has also slipped, while Hungary's BUX trades on a firmer footing.