POLAND: Karol Nawrocki Takes Office As President Of Poland
- Karol Nawrocki will be sworn in as President of Poland during a special meeting of the National Assembly. Ahead of Nawrocki's surprise victory in June, we wrote that his presidency would likely result in an escalation in the ongoing stand-off between the 'Big Palace' (Presidential Palace) and 'Small Palace' (Prime Minister's Chancellery). Most observers agree that the uneasy cohabitation exacerbates fiscal risks, putting pressure on the incumbent government not to cut spending ahead of the high-stakes 2027 parliamentary elections. Meanwhile, many of Nawrocki's flagship campaign pledges revolved around tax breaks and he is expected to table relevant legislation in the first days after taking office, causing a conundrum for the government.
- Nawrocki's chief aide told PAP news agency that the incoming President is looking to table draft bills on the Central Communication Port (CPK), PIT exemption for families with 2+ children and rejection of the EU-MERCOSUR deal.
- Quoting estimates from Nawrocki's team, Money.pl reported that zeroing out personal-income tax for families with at least two children would cost the budget around PLN13bn.
- Prime Minister Donald Tusk has been preparing for a difficult cohabitation, reshuffling his Cabinet to that effect and calling on his allies to close ranks in the period ahead.
- Law and Justice (PiS) leader Jarosław Kaczyński said that he still wants to 'build a patriotic front' and intimated that he was open to cooperation with far-right Confederation, despite a recent exchange of barbs. Both largest right-wing parties are facing conflicting incentives as they compete for status on their side of the political spectrum, while seeing each other as potential coalition partners after 2027.
- Finance Minister Andrzej Domański announced the creation of Individual Savings Accounts (locally abbreviated as OKI) with the income on up to PLN100,000 exempt from tax.
- The Finance Ministry is looking to sell PLN8bn-12bn worth of OK0128, PS0730, WZ0930, DS0432, DS1034 and DS1035 bonds at an auction today. The lower supply limit was increased by PLN2bn relative to the monthly issuance schedule.
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AUDUSD TECHS: Pullback Appears Corrective
- RES 4: 0.6700 76.4% retracement of the Sep 30 ‘24 - Apr 9 bear leg
- RES 3: 0.6688 High Nov 7 ‘24
- RES 2: 0.6603 High Nov 11 ‘24
- RES 1: 0.6590 High Jul 01
- PRICE: 0.6508 @ 08:03 BST Jul 07
- SUP 1: 0.6500 Intraday low
- SUP 2: 0.6471/6373 50-day EMA / Low Jun 23 and a reversal trigger
- SUP 3: 0.6357 Low May 12
- SUP 4: 0.6275 Low Apr 14
The trend set-up in AUDUSD remains bullish and the latest pullback appears corrective - for now. Recent gains maintain the bullish price sequence of higher highs and higher lows, the definition of an uptrend. Note too that moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 0.6603 next, the Nov 11 2024 high. Initial firm support to watch is 0.6471, the 50-day EMA.
GILT TECHS: (U5) Monitoring Resistance
- RES 4: 93.76 High Jul 1 and key resistance
- RES 3: 93.41 High Jul 2
- RES 2: 93.26 76.4% retracement of the Jul 1 -2 sell-off
- RES 1: 92.79 High Jul 4
- PRICE: 92.38 @ Close Jul 4
- SUP 1: 92.12/91.63 Low Jul 3 / 2
- SUP 2: 91.50 61.8% retracement of the May 22 - Jul 1 bull leg
- SUP 3: 91.16 Low Feb 2
- SUP 4: 90.97 76.4% retracement of the May 22 - Jul 1 bull leg
Gilt futures faced strong selling pressure on Jul 2. The move down has cancelled a recent bullish theme - price breached the 20-day EMA and traded through a key support at 92.23, the Jun 16 low. The break suggests potential for an extension towards 91.50 next, a Fibonacci retracement. Price action is volatile. Initial resistance to watch is 92.79, the Jul 4 high. A resumption of gains would open the 93.41 high instead.
GILTS: Opening calls
- Gilt calls, 92.33/92.37.
Watch Bund and Tnotes, they are at session lows, but mostly Two way flows.
