Zloty Inches Higher, Budget Draft Steals Limelight Locally

EUR/PLN has edged lower this morning, but familiar trend conditions remain intact, as the pair struggles to challenge the extremes of a well-established trading range. It last operates -95 pips at 4.4712 after ticking lower into the European session. From a technical perspective, a dip through Jul 31 low of 4.3986 is needed to signal the resumption of bearish momentum. Conversely, bulls continue to look for gains past Jul 6 high of 4.5040.

• POLGB yields sit higher, curve has steepened, with yields in core FI space also biased higher. The local bond market might be under some additional pressure following the adoption of the 2024 budget plan yesterday, which forecasts a wider-than-expected deficit as well as a notable increase in net borrowing needs. We have summarised sell-side reactions to the spending plan in an earlier bullet.