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Zloty Lags Regional Peers After Disappointing Round Of Data

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EUR/PLN creeps higher this morning, despite a downtick in the BBDXY Index. The zloty sits at the bottom of the EMEA scoreboard, even as its regional peers HUF and CZK have managed to register modest gains. Part of the zloty's weakness could be explained by relatively downbeat economic activity data, although the currency started depreciating before the release of their second batch (retail sales) this morning.

  • The latest retail sales data confirmed that private consumption kept growing in March, as real wage growth remained strong, but missed expectations despite positive seasonals (Easter holidays) and the potential front-loading of food purchases ahead of the reinstatement of 5% VAT. Coupled with yesterday's batch of weaker-than-expected data on industrial production and construction output, this bodes ill for the pace of Poland's economic rebound at the start of the year.
  • When this is being typed, EUR/PLN trades +182 pips at 4.3352, with bulls looking to attack Apr 16 high of 4.3728. Bears keep an eye on a support area around Apr 9 low of 4.2527 and the nearby round figure of 4.2500.
  • POLGB yields are 1.5bp-2.3bp higher, curve runs a tad flatter. The Finance Ministry will hold a debt auction, with PLN6bn-10bn worth of bonds on offer.
  • The WIG20 Index pulls back (-1.2% on the session) after failing to challenge recent cyclical highs on yesterday's upswing.
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EUR/PLN creeps higher this morning, despite a downtick in the BBDXY Index. The zloty sits at the bottom of the EMEA scoreboard, even as its regional peers HUF and CZK have managed to register modest gains. Part of the zloty's weakness could be explained by relatively downbeat economic activity data, although the currency started depreciating before the release of their second batch (retail sales) this morning.

  • The latest retail sales data confirmed that private consumption kept growing in March, as real wage growth remained strong, but missed expectations despite positive seasonals (Easter holidays) and the potential front-loading of food purchases ahead of the reinstatement of 5% VAT. Coupled with yesterday's batch of weaker-than-expected data on industrial production and construction output, this bodes ill for the pace of Poland's economic rebound at the start of the year.
  • When this is being typed, EUR/PLN trades +182 pips at 4.3352, with bulls looking to attack Apr 16 high of 4.3728. Bears keep an eye on a support area around Apr 9 low of 4.2527 and the nearby round figure of 4.2500.
  • POLGB yields are 1.5bp-2.3bp higher, curve runs a tad flatter. The Finance Ministry will hold a debt auction, with PLN6bn-10bn worth of bonds on offer.
  • The WIG20 Index pulls back (-1.2% on the session) after failing to challenge recent cyclical highs on yesterday's upswing.