PLN: Dust Settles After NBP Presser, Zloty Edges Higher
EUR/PLN has sold off this morning, erasing the entirety of yesterday's gains. The pair last deals at 4.2282, down 57 pips on the day, with a bearish 50-DMA/200-DMA structure consolidating further. A sustained breach of the 4.22 mark would open up the 4.20 handle. Conversely, according to our technical analyst, initial bullish focus falls on 4.2693, the Oct 10 high.
- The Prime Minister is addressing lawmakers at a closed session, but numerous leaks suggested that he was supposed to talk about the use of cryptocurrencies by Russian secret services to finance criminal groups operating in Poland. There have been suggestions that he might use this information to pressure MPs to overturn President's Karol Nawrocki's veto to the governing coalition's draft bill regulating crypto assets. WP.pl reported that the main opposition Law and Justice (PiS) was expected to oppose overturning the veto.
- Governor Glapiński signalled that the MPC was about to move into wait-and-see mode before considering further cuts and indicated that while he would be satisfied with a 4% reference rate, other members have been pushing for a lower rate.
- The minutes of the NBP's November meeting (-25bp) and data on official reserves will cross the wires at 13:00GMT/14:00CET.
- POLGB yields rose early on, then eased off highs. The 2-year/10-year spread has widened at the margin.
- The WIG Index has added 0.3%, with WIG20 last seen a touch higher too.
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FOREX: FX OPTION EXPIRY - Large in NZDUSD
Of note:
NZDUSD 2.67bn at 0.5650/0.5675 (could act as magnet).
EURUSD 1.62bn at 1.1500 (thu).
GBPUSD 1.01bn at 1.3100 (thu).
USDJPY 1.14bn at 153.00 (thu).
EURUSD ~1bn at 1.1500 (fri).
AUDUSD ~1bn at 0.6500 (fri).
EURUSD 2.86bn at 1.1475/1.1500 (mon).
- EURUSD: 1.1480 (272mln), 1.1485 (370mln), 1.1500 (498mln), 1.1525 (630mln), 1.1600 (656mln).
- GBPUSD: 1.3050 (406mln).
- NZDUSD: 0.5650 (1.4bn), 0.5675 (1.27bn).
EUROZONE DATA: Strong France IP Driven By Transport Equipment, Amid Revisions
French industrial production for September came in firmer than expected at 0.76% M/M (0.1% Bloomberg consensus) as it recovered after an weaker August than first thought with -0.9% M/M. Manufacturing output also increased 0.9% M/M (vs -1.0% August, downwardly revised from -0.7%).
- Looking at the details, transport equipment rebounded strongly (5.5% M/M vs -4.3% prior), "following the lead of the aerospace industry, which, since June, has been the sector contributing most to chances in manufacturing output", notes INSEE. "Other transport equipment" also rebounded 7.1% (vs -5.8% prior). More modest rebounds were seen in electricals, food processing and refining.
- Though M/M increases were seen across most subcomponents, mining and quarrying saw a notable -4.7% M/M fall (vs 0.6% prior). Declines were also seen in "Other industrial products" (-0.3% M/M vs -0.2% prior), a category that includes metallurgy, chemicals and pharmaceuticals.
- On a Y/Y basis, industrial production rose 1.3% (0.6% Bloomberg consensus) after a downwardly revised 0.1% (from 0.4% prior) and manufacturing output grew 1.5% (0.2% prior, revised down from 0.5%).
- Revisions to the data, as usual, are attributed to the inclusion of late responses from some companies.
EGB OPTIONS: Bund Call Spread
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