Zloty Loses Ground, EUR/PLN Moves Away From Multi-Month Lows

EUR/PLN creeps higher after printing its worst levels since Jun 8, 2022 yesterday. The Zloty may have come under some pressure from reports surrounding an unidentified military object which fell near the city of Bydgoszcz in northern Poland.

• When this is being typed, EUR/PLN trades +57 pips at PLN4.5896. The initial bullish target is provided by the 20-EMA, which kicks in at PLN4.6316. Conversely, bears look for a resumption of losses towards Jun 8, 2022/May 30, 2022 lows of PLN4.5631/4.5599.
• RMF FM radio unofficially reported that the object found near Bydgoszcz was an air-to-surface missile, likely belonging to the Polish army. It is unclear if it has exploded. The site is located close to a military airport and a repair centre for military aircraft.
• POLGB curve has bull steepened, with yields last seen 1.3-5.9bp lower, while 2-year/10-year spread widening to the most in more than a week after returning from negative territory a few days back.
• The WIG20 index has added ~1.6% today, with bulls looking to test the Apr 20 cyclical high of 1,926.