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Zloty & POLGBs Rally, 10-Year Yield Hits New Cycle Lows

PLN

EUR/PLN sold off sharply amid broad-based euro weakness taking hold during the press conference with ECB Governor Lagarde. There has been little in the way of local news to amplify the move, but all EMEA currencies save for the RUB and CZK are currently outperforming the EUR.

  • The rate has now ticked away of session lows (PLN4.6787) in a corrective bounce. This blip off worst levels might be associated with the latest round of comments from Russian President Vladimir Putin, who threatened to "deploy more than just tanks" in Ukraine.
  • When this is being typed, EUR/PLN trades -166 pips at PLN4.6875. As flagged in the previous update, further losses past Jan 4 low of PLN4.6573 would open up Dec 26/Jun 21 lows of PLN4.6270/62.
  • POLGBs have caught a bid alongside core FI space, with yields last seen 19.7-25.5bp lower across the curve. Benchmark 10-year yield printed new multi-month lows at 5.89%.

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