Zloty On Back Foot After EUR/PLN Failed To Establish Itself Below 4.30

The initial line in the sand for EUR/PLN has been drawn at 4.30, with yesterday's brief foray beyond that figure failing to result in a sustained breach. The pair continues to hover above there, last +56 pips at 4.3116. The zloty is among the worst performers in the EMEA FX space, lagging both CZK and HUF.

• The debate on the zloty's ability to breach 4.30 remains live, with Millennium Bank putting in their two cents and arguing that the currency lacks argument for such a move. In their view, local factors won't be sufficient to result in a breach of 4.30 and all will depend on EUR/USD. By contrast, ING see scope for a move towards 4.27 but only within a few weeks, while Alior Bank pin everything on the timeline for the release of EU aid.
• POLGB yields are marginally mixed this morning. The Finance Ministry sold PLN9bn worth of POLGBs yesterday, attracting demand for PLN12.4bn, with a further PLN291bn sold at a top-up auction. The Ministry said that Poland has now financed 43.2% of its 2024 borrowing needs.
• Local stocks have come under pressure amid broader risk-off sentiment, with WIG20 moving 1.3% lower in morning trade.