Zloty Tad Firmer Ahead Of NBP Rate Decision

Spot EUR/PLN trades on a slightly heavier footing ahead of the NBP's rate decision due later today. Virtually all economists look for an on-hold decision, but they will pay close attention to any nuances in the central bank's rhetoric, with some suggesting that the new inflation projection might show a return to the target towards the end of an extended forecast horizon. The main parameters of the new projection should be included in today's MPC statement.

• The pair last deals -22 pips at 4.3100, with the 4.30 figure providing the initial line in the sand. A clean break here would instantly bring Dec 13 low of 4.2935 into play. On the flip side, bulls keep an eye on Feb 7 high of 4.3564.
• POLGBs have softened across the curve, with yields last seen 7.1-7.8bp higher. The WIG20 Index has added 0.4% this morning, snapping a two-day losing streak.
• Elsewhere, PM Tusk said that the government will make a final decision on the future of the 0% VAT on food by the end of this week.