Zloty Loses Ground, NBP Rate Decision Up This Week

The recent bear leg in EUR/PLN has lost steam upon the release of strong US NFP data on Friday, with the pair now moving away from its YtD lows. When this is being typed, it trades +106 pips at 4.3260. A break above Jan 17 high of 4.4124 is needed to revive bullish momentum. Conversely, bears set their sights on Dec 13 low of 4.2935.

• The Monetary Policy Committee (MPC) will announce its latest rate decision on Wednesday, which will be followed by a press conference with Governor Adam Glapinski on Thursday. All 29 economists polled by Bloomberg currently expect the NBP to stand pat on rates this week, with recent communications suggesting that there is little scope for any adjustments before the publication of the new macroeconomic projection in March.
• The ruling coalition prepares for the next phase of its confrontation with the former ruling party PiS amid expectations of an imminent attempt to revamp the Constitutional Tribunal, allegedly politicised by the previous administration and stacked with its loyalists.
• POLGB yields sit slightly higher across the curve, while the WIG20 Index has inched closer to its cyclical high from Dec 28.