Zloty Remains In Post-Election Festive Mood

EUR/PLN remains on a heavier footing as the vote count confirmed that Poland's ruling Law and Justice party is set to lose power. The pair last deals -209 pips at 4.4310, with the zloty outperforming all its EMEA peers. Technically, the focus falls on Jul 31 low of 4.3986, a cyclical low for the pair.

• POLGBs are marginally softer, with yields last seen 0.9-2.3bp higher across the curve. Polish FRAs are stable to marginally higher. The WIG20 Index has added a further 1.8%, building on yesterday's gains.
• Final results of Poland's parliamentary elections have been released, with pro-EU opposition grabbing 248 seats, which implies a comfortable margin above the absolute majority threshold (231). Considering earlier suggestions, the incumbents are expected to be asked to try and form government. Failing that, the pro-EU coalition will take over and the new administration may assume power within around two months.
• Moody's wrote that the anticipated change of government in Poland will lead to an improvement in relations with the EU, which would be a credit-positive factor.
• Poland's core CPI inflation eased to +8.4% Y/Y in September versus +8.6% expected, official data showed yesterday. In addition, core prices fell 0.1% M/M.