Zloty Shows Little Reaction To Local Data

There has been only a fleeting reaction in the Zloty to the release of weak Polish macroeconomic data, with EUR/PLN promptly unwinding the resultant uptick. The rate last deals at PLN4.6125, little changed on the session, with bears looking for a sell-off towards Jun 9, 2022 low of PLN4.5781. Bulls keep an eye on the 20-EMA at PLN4.6475.

• Industrial output (-2.9% Y/Y vs. -2.2% expected) and retail sales (+4.8% Y/Y vs. +7.7% expected) were both weaker than forecast, which was accompanied by a surprise contraction in construction output. PPI inflation slowed sharply to +10.1% Y/Y from the revised +18.2%, missing the +11.0% estimate.
• Polish FRA contracts have now retraced their mild downticks posted in reaction to the data amid the absence of any notable shift in NBP expectations. Poland's central bank will announce its next monetary policy decision on May 10.
• POLGBs are 2.9-3.9bp firmer across the curve at typing. Local equity benchmark WIG20 sits ~0.5% lower on the day.