Zloty Stays Buoyant Despite Below-Forecast Inflation Figures

EUR/PLN sold off sharply into the European morning and has remained stable near session lows after the release of Poland's CPI data for January. The rate last trades -148 pips at PLN4.7591, with the PLN sitting atop the EMEA pile.

• From a technical standpoint, the key near-term support is located at PLN4.6787, which limited losses on Feb 2 - a breach of that level would reinstate the bearish theme. Bulls look for a rebound towards the 61.8% and 76.4% retracements of the Sep 30 - Dec 26 sell-off at PLN4.7945 and PLN4.8340 respectively.
• POLGB yields have declined across the curve and last sit 8.2-11.8bp below neutral levels, with benchmark 10-year yield rejecting resistance from its 50-DMA to ease off towards the psychological 6% level.
• Poland's CPI came in at +17.2% Y/Y in January, missing the +17.6% consensus forecast, which will play into the hands of dovish MPC members. That said, local sell-side desks have warned that the reading will likely be revised higher when the local statistics bureau updates CPI weightings in March.
• The next key risk event is the announcement from the ECJ tomorrow, which will clarify the EU court's thinking on a case brought by Polish borrowers against lenders offering Swiss franc mortgages.