Zloty Treads Water Amid Post-NBP Musings, Polish FRAs Remain Under Pressure

EUR/PLN oscillates around unchanged levels, last sitting at 4.4434, looking for fresh catalysts. A sell-off past Jul 4 low of 4.4138 would reignite bearish momentum, while a clean break above the 50-EMA/round figure at 4.4941/4.5000 would indicate scope for further gains.

• The dust settles after the NBP's monetary policy decision and Governor Glapinski's press conference last week, which strengthened the conviction that the central bank will likely cut rates before the upcoming parliamentary election. Click here to see our review of the decision, including a summary of sell-side views.
• NBP's Henryk Wnorowski said that he is "not fixated" on the timing of potential rate cuts. The policymaker said that inflation needs to ease below +10% Y/Y for the MPC to consider cutting rates, but if price growth is just "symbolically" below +10%, it wouldn't be a reason for a rate cut.
• POLGBs are slightly firmer across the curve, while Polish FRAs have adjusted lower. Downward pressure on rates is not limited to Polish markets, but the downswing in local FRA contracts is relatively pronounced.