Zloty Remains Weaker After Polish Data

EUR/PLN has shown limited reaction to local data, which were a mixed bag. The rate operates +77 pips at PLN4.7103. Bulls need a clearance of Feb 22 high of PLN4.7654 to get some firmer impetus, while bears eye Mar 1 low of PLN4.6620 for initial support.

• In Polish data:
  • The economy is losing steam, with industrial output coming in at -1.2% Y/Y versus +0.8% expected, as the previous reading was downgraded to +1.8%. Employment growth was also lower than expected at +0.8% Y/Y (median est. +1.0%).
  • On the other hand, average gross wages were firmer than forecast at +13.6% Y/Y versus +11.9% expected. Factory-gate inflation eased to +18.4% Y/Y but consensus called for +17.7%, while the previous reading was revised higher to +20.1%.
• The WIG20 Index has recovered from session lows but remains ~1.1% worse off, with the WIG Banking Index last ~2.4% lower amid continued concerns over the health of the European banking sector.
• POLGBs have firmed on a lead from core markets and last trade 6.8-11.8bp richer across the curve, with benchmark 10-year yield hitting new multi-week lows.