Zloty Stable With Domestic Politics Still In Focus

EUR/PLN stabilises just above the 4.45 mark in the wake of its election-induced sell-off, while POLGB yields have crept higher on a lead from core FI markets. When this is being typed, EUR/PLN changes hands at 4.4594, barely changed on the session. Technically, a break through Oct 17/Jul 31 lows of 4.4096/4.3986 would signal that bearish momentum is intact. Bulls look for a move through the 50-EMA at 4.5328.

• Politics continues to steal the limelight, with another busy week ahead. Leaders of pro-EU opposition parties will issue a joint statement tomorrow, likely to demonstrate their determination to form a coalition government. The President will consult with party representatives on Tuesday and Wednesday to gauge the viability of various coalition scenarios. On Thursday, opposition leader Donald Tusk will travel to Brussels for an EPP summit and may discuss frozen EU funding on the sidelines of the event.
• Poland's September construction output came in better than anticipated at +11.5% Y/Y. The median estimate in a Bloomberg survey was +5.9%. ING write that the expectation-busting outturn was due to (1) looser regulations, (2) lower interest rates, and (3) launching the "Mortgage 2%" programme, which stimulated demand for new dwellings. They now think that GDP growth was +0.5% Y/Y in 3Q2023 and will average at +0.4% Y/Y for the full year, while upside risks to their current +2.5% Y/Y forecast for 2024 strengthening.