Zloty Trades Sideways, Unemployment Rate Slips

EUR/PLN struggles for a clear direction and last trades at PLN4.5033, a touch lower on the day. A resumption of gains past the 20-EMA at PLN4.5382 and May 18 high of PLN4.5547 would signal potential for a stronger rally. Bears need a breach of the recent PLN4.4784/67 support area before targeting Jun 7, 2021 low of PLN4.4360.

• POLGB yield curve has bear steepened, with 5s underperforming after a local auction. Poland sold PLN7bn of bonds (OK1025, PS0728,WZ1128, DS1033), attracting demand for PLN8.18bn. The Ministry of Finance was planning to sell PLN4-7bn, which Millenium Bank noted was PLN1bn less than suggested in the initial schedule. PKO BP were expecting the sold amount to be around PLN6-7bn.
• Poland's unemployment rate fell to 5.2% in April from 5.4% before, which was lower than the consensus forecast and preliminary estimate from the Ministry of of Family and Social Policy (5.3%). BOS Bank estimate that the jobless rate will fall to 5.0% (or slightly below) in summer before rebounding to 5.2%-5.3% into the year-end.
• NBP's Ireneusz Dabrowski reiterated that he sees scope for rate cuts by the end of this year (probably in November or December rather than before the parliamentary election). Dabrowski added that "it will certainly not be a hasty decision" and but will be based on macroeconomic data. He also expressed optimism about disinflation.