Zloty Weakens, Local Data Under Scrutiny

EUR/PLN has traded with a bullish bias and last operates +122 pips at PLN4.7183, with the release of local macroeconomic data doing little to affect the pair's general trajectory. On the topside, technical focus falls on Jan 19 high of PLN4.7453, followed by Nov 16 high of PLN4.7848. Conversely, losses past Jan 4 low of PLN4.6573 would expose Dec 26/Jun 21 lows of PLN4.6270/62.

• POLGBs turned bid in morning trade but have now trimmed those gains and last trade 0.9-2.6bp richer, with the yield curve running marginally steeper. Poland/Germany 10-year yield spread has tightened, albeit it is yet to test its recent narrows.
• Poland's activity data were softer than expected, with industrial output growing 1.0% Y/Y versus +1.7% expected and retail sales expanding 15.5% Y/Y versus +17.8% forecast by analysts.
• By contrast, PPI inflation for December was +20.4% Y/Y, printing above the +19.4% median estimate, with the prior reading revised higher to +21.1% from +20.8%.