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Zloty Weakens, Corrects Weekly Advance

PLN
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EUR/PLN snaps a four-day losing streak and adds 79 pips to last trade at 4.2671. A scrutiny of the latest round of morning sell-side notes suggests that analysts see little potential for renewed zloty appreciation into the end of this week. From a technical perspective, the pair operates just above key support from Apr 9 low/round figure of 4.2527/00. The 50-EMA provides the initial layer of resistance at 4.3048, just above the psychologically significant 4.30 figure.

  • Core inflation cooled to +4.1% Y/Y in April, according to the latest data from the NBP, in line with expectations. However, underlying price growth may stabilise going forward. Governor Glapinski suggested that it may oscillate around +4% Y/Y in 2H2024, with sell-side desks pointing to the moderation in earlier favourable base effects. Santander write that core inflation may rebound to +4.8% Y/Y in December, while mBank see it at +5%-6% Y/Y at the end of the year. Pekao offer a more benign forecast, noting that core inflation will fall to around +3.5% Y/Y in their view and may stay there until the end of the year.
  • POLGB yields have edged higher (+0.1-2.8bp), curve runs slightly steeper, even as 5s underperform at the margin. The WIG20 Index has shed 0.8%, moving away from recent cyclical highs.
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EUR/PLN snaps a four-day losing streak and adds 79 pips to last trade at 4.2671. A scrutiny of the latest round of morning sell-side notes suggests that analysts see little potential for renewed zloty appreciation into the end of this week. From a technical perspective, the pair operates just above key support from Apr 9 low/round figure of 4.2527/00. The 50-EMA provides the initial layer of resistance at 4.3048, just above the psychologically significant 4.30 figure.

  • Core inflation cooled to +4.1% Y/Y in April, according to the latest data from the NBP, in line with expectations. However, underlying price growth may stabilise going forward. Governor Glapinski suggested that it may oscillate around +4% Y/Y in 2H2024, with sell-side desks pointing to the moderation in earlier favourable base effects. Santander write that core inflation may rebound to +4.8% Y/Y in December, while mBank see it at +5%-6% Y/Y at the end of the year. Pekao offer a more benign forecast, noting that core inflation will fall to around +3.5% Y/Y in their view and may stay there until the end of the year.
  • POLGB yields have edged higher (+0.1-2.8bp), curve runs slightly steeper, even as 5s underperform at the margin. The WIG20 Index has shed 0.8%, moving away from recent cyclical highs.