Zloty On Softer Footing But Stick To Familiar Range

EUR/PLN trades at PLN4.6988, up 95 pips on the day, as it sticks to a well-defined range. On the topside, technical focus falls on Dec 6 high of PLN4.7220. Conversely, a dip through Jan 4 low of PLN4.6573 would bring Dec 26 low of PLN4.6270 into play.

• Polish local-currency bonds have faltered today, with yields last 6.5-10.4bp higher, as the 3-5 sector underperforms. The 2/10-year yield spread has retraced some of its initial widening.
• NBP board member Pawel Mucha (does not sit on the MPC) told TVN24 that inflation is below earlier expectations but will temporarily increase in 1Q2023, but we should see disinflation take hold from March. He noted that GDP could shrink in Q1 but Poland is not expected to experience recession.
• The local economic docket is very light until the release of wage & employment data this Friday.