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Zloty Loses Ground As Risk-Off Impetus Hurts EM FX


EUR/PLN has ticked higher amid risk-negative sentiment and last deals +79 pips at PLN4.6875. Topside technical focus falls on Feb 22 high of PLN4.7654, while bears see Mar 1 low of PLN4.6620 as their initial target.

  • POLGBs are firmer across the curve, rallying on a positive lead from core FI space. Yields last sit 13.0-16.8bp richer across the curve, albeit 10-year POLGB/Bund yield differential has widened. In the equity space, Poland's benchmark index WIG20 is ~2.8% worse off today, lodging fresh YtD lows.
  • The dust settles after the NBP's monetary policy decision and publication of new macroeconomic forecasts last week (see our review here). Speaking after hours Friday, MPC's Przemyslaw Litwiniuk said he couldn't rule out the scenario whereby inflation reaches single-digit levels by the year-end, but noted that it rests upon optimistic assumptions, adding that he does not expect interest-rate cuts this year and next.
  • The local economic docket is virtually empty today, with February CPI data coming up Wednesday. It is expected that inflation peaked last month, likely at +18.5% Y/Y.

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