Zloty On Defensive Ahead Of NBP Presser

EUR/PLN last changes hands +123 pips at 4.3010, clawing back yesterday's losses and returning above 4.30 in the lead-up to NBP Governor's media briefing. The zloty is the worst performer in the EM FX space as we type. Technically, bulls look for gains past Apr 16 high of 4.3728, which would reinstate a short-term bullish theme. Bears keep an eye on Apr 9 low of 4.2527 and the 4.25 figure.

• The NBP left interest rates unchanged yesterday, while the statement contained no major surprises. The focus appears to be shifting towards the demand side ("marked" increase in wages, concern about the pass-through from energy prices to inflation expectations) as uncertainty around fiscal and regulatory factors has diminished - in line with what we wrote in the review of the April decision ("the NBP’s rhetoric may start placing more emphasis on core inflation once the ramifications of the reinstatement of the 5% VAT rate on food and the removal of the energy price freeze are clearer"). The Governor will hold his press conference at 14:00BST/15:00CEST.
• PM Donald Tusk announced a reshuffle of his cabinet - see an earlier bullet ('POLAND: PM Tusk Confirms New Ministers In Cabinet Reshuffle').
• POLGB yields are lower across the curve; the WIG20 Index sits 0.4% lower on the day, despite refreshing cyclical highs earlier in the day.