Zloty Slips With NBP Matters In Focus

EUR/PLN trades on a slightly firmer footing, last +47 pips at 4.3154. Our technical analyst flags the 50-EMA (4.3240) as the initial layer of resistance, followed by Feb 7 high of 4.3564. On the flip side, a break below the 4.30 figure would open up Mar 11 low of 4.2749, a recent cyclical low.

• The zloty has been unfazed by the tabling of a motion to launch a probe into the actions of NBP Governor Glapinski. Some have linked the muted market reaction to the lengthy and obscure nature of the process, as well as its highly uncertain outcome, the lack of precedents, and significant legal ambiguity around a number of key issues. ING analysts cited their conversations with investors, who "share the opinion that even if the zloty would depreciate, it would make sense to buy it again" as "our currency is supported by the fundamentals, such as a rebound in GDP [growth] and the inflow of FDI, capital into the stock exchange and debt market, and large EU funds." They expect EUR/PLN to move below 4.30 this week and towards 4.20 in 2Q24.
• MPC's Maslowska (no cuts likely before 2H25/start of '26) and Duda (no room for interest rate cuts this year) played down the potential for any immediate monetary easing. Meanwhile, Kotecki outlined a very hawkish inflation forecast, claiming that CPI could rise to +7%-8% Y/Y or higher as soon as in April-June.
• POLGB yields are lower across the curve (off session lows now), while the WIG20 Index consolidates yesterday's gains.