Zloty Remains Afloat, Consolidates Post-NBP Gains

The market has priced out the bulk of NBP rate cuts pencilled in for this year as Governor Adam Glapinski declared that his baseline scenario assumes rates staying unchanged through end-2024. His declaration put a bid into the zloty, prompting EUR/PLN to test recent support levels just above the 4.30 mark. The local FRA space holds onto yesterday's gains, with 9x12 contracts last trading at a 50bp spread with 3-Month WIBOR versus 72bp the day before and just shy of 100bp at the end of last week. Sell-side analysts remain more hawkish than the market, despite this shift in pricing, with a growing number of desks seeing little chance of renewed NBP rate cuts this year.

• We have described the details of this week's monetary policy decision and press conference in more detail in our usual review, which also includes a summary of sell-side views. Click here to access the document.
• EUR/PLN last deals at 4.3324, some 30 pips worse off. A clean breach of Feb 1 low of 4.3069 would allow bears to set their sights on Dec 13 low of 4.2935. On the flip side, bulls look for a rebound above Feb 7 high of 4.3564.
• USD/PLN hovers above the 4.00 figure despite briefly showing below there as it bottomed out at 3.9979 this morning.
• PLN/CZK refreshed cyclical gains at 5.8495 before pulling back but it holds onto most of its post-CB gains, with the RSI flirting with overbought territory.