Zloty Stays Strong, Gov't Bond Yields Trim Declines

The Zloty operates near session highs and is the best EMEA performer today, with local CPI data front and centre. In her first interview as MPC member, Iwona Duda called the current level of interest rates "optimal," with below-forecast inflation readings seen supporting the case for continued rate-hike pause, even as analysts have suggested that price growth will only reach its peak next year.

• Polish gov't bond yields have trimmed post-CPI declines and last sit 5.5-7.7bp lower across the curve. Benchmark 10-year yield bottomed out at 6.54% before moving away from there. Poland/Germany 10-year yield spread has unwound some of its earlier tightening but the differential remains narrower on the day.
• EUR/PLN last deals at PLN4.6632, down 131 pips on the day. The next downside target is provided by PLN4.6528, which limited losses on Aug 15.
• USD/PLN changes hands at PLN4.4914, down 361 pips on the day. A break under Nov 28 low of PLN4.4596 would expose the PLN4.4000 round figure and Jun 21 low of PLN4.3857.