Zloty Tad Weaker, POLGBs Edge Higher

EUR/PLN continues to operate in a well-defined trading range (albeit trending towards its upper end recently), last +52 pips on the day at 4.4733. A break above Jul 6 high of 4.5040 would suggest that bullish pressure is gathering steam. Bears look for a pullback towards Jul 31 low of 4.3986.

• POLGBs last trade 2.4-4.7bp richer across the curve. Yesterday's auction for OK1025, PS0728, WZ1128, DS1030 and DS1033 attracted decent demand (PLN12.08bn versus PLN8bn on offer), but was overshadowed by spillover from core markets. This morning, mBank issued a trade recommendation to re-open 10-year POLGB long position. They closed an analogical recommendation a month ago, but now say that "weak PMI readings on both sides of the Atlantic poured cold water on market expectations surrounding economic growth prospects," while "macro data coming out of Poland remain weak, which delays recovery in economic activity."
• Poland's unemployment rate stayed at 5.0% in July, matching expectations and preliminary data from the Ministry of Family and Social Policy.