Zloty In Positive Territory, NBP Speak Under Scrutiny

EUR/PLN trades -54 pips at PLN4.6837. The technical outlook for the pair remains bearish, with Nov 30 low of PLN4.6595 providing the initial layer of support, followed by Aug 25 low of PLN46528. Bulls look for a rebound above Nov 16 high of PLN4.7848.

• From a cross asset perspective, it is worth noting that the yields on Polish gov't bond yields have crept higher across the curve, with weekend comments from ruling party leader Kaczynski doing little to prevent that move. The official told Gazeta Polska that the court bill put together to unblock EU recovery funds would likely meet the European Commission's targets, but could damage the nation's judicial system and thus requires more consultations.
• NBP's Wnorowski told Interia.pl that the central bank could start discussing interest-rate cuts in 2023 if it sees three consecutive months of reduction in headline inflation, but actual monetary easing is unlikely next year. The market still expects the rate-cut cycle to start within the next 12 months, based on FRA 12x15 contracts, but pricing to that effect has moderated since the beginning of December.
• The local data docket is virtually empty today, with wage/employment figures, industrial output and PPI coming up tomorrow.