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Zloty Ticks Lower, EUR/PLN Holds Below 50-EMA

PLN

EUR/PLN continues to track below its 50-EMA (4.3729), last dealing +73 pips at 4.3589. A clearance of that moving average would suggest that a firmer recovery might be underway. Conversely, bears look for a pullback towards Dec 13 low of 4.2935.

  • POLGB curve has bear flattened this morning, with yields last seen 3.4-4.9bp above previous closing levels. This represents a modest unwinding of the space's reaction to dovish flash CPI data released out of Poland ahead of the weekend.
  • Below-forecast December CPI readings came out as the MPC was preparing for its monetary policy meeting this week, with the announcement of the decision expected at some point tomorrow (there is no fixed time for the announcement).
  • Elsewhere, parliament will start debating the 2024 budget in second reading this week amid the ongoing political conflict over the sentencing and removal of two Law and Justice lawmakers.
  • It is worth noting that on Thursday the Constitutional Tribunal will review parts of the bill regulating the operation of the Tribunal of State pertaining to the procedure of bringing a case against a sitting NBP Governor.

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