PLN: EUR/PLN Returns Above 4.25

EUR/PLN has staged a rebound back above 4.25 and last deals +115 pips at 4.2514 and bulls look for a break above Apr 7/Dec 25 highs of 4.3057/4.3114. On the flip side, initial focus is on Feb 4 high of 4.2379.

• Geopolitical risk resurfaced again this week after a confirmation of US decision to pull out troops from the Rzeszow-Jasionka airfield, the main hub for delivering military aid for Ukraine, and re-locate them to other places in Poland. The Defence Ministry said that European allies are gradually taking over the tasks earlier performed by US troops.
  • Onet reported that the logistical hub for Ukraine aid may be re-located to Lublin amid a planned renovation of the runway in Rzeszow-Jasionka. The article notes that US troops will be moved to Zagan, close to the German border, although several possible locations have been flagged in local media.
• NBP's Joanna Tyrowicz reaffirmed her hawkish calls and said that the MPC would be making another error should it deliver the expected rate cut in May. The 3-month WIBOR/1x4 FRA spread is now -40bp amid a debate whether the central bank could adjust rates by as much as 50bp.
• POLGB curve has bull flattened, yields sit 0.8-7.2bp lower. 10-year POLGB/Bund yield spread has widened further to 267bp.
• The WIG Index is ~4% better off after a catch-up move following yesterday's update on US tariffs.