POLAND: NBP Starts Two-Day MonPol Meeting, FinMin Admits Poland Could Face EU Deficit Procedure
- The NBP's Monetary Policy Council begins its two-day meeting to decide on interest rates. This is the first "live" NBP meeting in months, as the central bank could go ahead inaugurate an easing cycle, even as inflation failed to decline below +10% Y/Y in August. Consensus looks for a 25bp rate cut, an outcome pencilled in by 20/36 economists surveyed by Bloomberg and well priced by the market (3-Month WIBOR/PLN FRA 1x4 spread is 28bp). There is broad conviction that even if the NBP holds off on a cut this month, it will lower interest rates in October at the latest. Click here to see our preview of the decision, including a summary of sell-side views.
- Finance Minister Magdalena Rzeczkowska told Business Insider that the higher fiscal deficit planned for next year will be caused by increased spending on defence, healthcare and social security, including the upcoming boost to child benefit payments. The official admitted that the 2024 budget plan exposes Poland to the EU excessive deficit procedure (EDP), but Warsaw will push for the exclusion of extra military spending from the EDP assessment due to the ongoing war in Ukraine.
- Government spokesman Piotr Muller said that the EU is unlikely to unlock post-COVID-19 recovery funds earmarked for Poland prior to the elections as "this is a plan of some politicians, political parties in Europe, to influence Polish elections." Muller added that the special commission investigating Russian political influence in Poland will likely start working before the elections, but the results can be expected after a few months at the earliest.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
JGB TECHS: (U3) Bought-on-Dips Theme Hits Pause
- RES 3: 151.26 - High Mar 3 2022
- RES 2: 149.75/150.81 - High Nov 11 / High Aug 5 2022
- RES 1: 149.21/53 High May 12 / High Mar 22
- PRICE: 146.48 @ 15:27 BST Aug 04
- SUP 1: 146.23 - Low Aug 03
- SUP 2: 146.11 - Low Feb 22
- SUP 3: 144.15 - Low Jan 13
JGBs corrected lower again Thursday, hitting new pullback lows. The phase of weakness began Monday, narrowing the gap with key support at the 146.11 low on the continuation contract - last printed back in February. The previous buy-on-dips theme appears to have paused, but any return higher will initially target the May 12 high of 149.21. Clearance of these levels would highlight an important break.
USDCAD TECHS: Approaching Key Resistance
- RES 4: 1.3462 High Jun 5
- RES 3: 1.3441 61.8% retracement of the May 26 - Jul 14 downleg
- RES 2: 1.3427 High Jun 7
- RES 1: 1.3387 High Jul 7 and a key resistance
- PRICE: 1.3358 @ 15:50 BST Aug 4
- SUP 1: 1.3244 20-day EMA
- SUP 2: 1.3151/3093 Low Jul 31 / 14 and the bear trigger
- SUP 3: 1.3084 1.618 proj of the Apr 28 - May 8 - May 26 price swing
- SUP 4: 1.3032 1.764 proj of the Apr 28 - May 8 - May 26 price swing
USDCAD short-term conditions have improved for bulls following this week’s strong recovery. Resistance at the 50-day EMA, which intersects at 1.3287, has been cleared. The move higher signals scope for a test of the next key resistance at 1.3387, the Jul 7 high. A break of this level would strengthen bullish conditions. Key support has been defined at 1.3093, the Jul 14 low. Initial support to watch lies at 1.3244, the 20-day EMA.
AUDUSD TECHS: Trading Closer To This Week’s Lows
- RES 4: 0.6900 High Jun 16 and a bull trigger
- RES 3: 0.6847 High Jul 20
- RES 2: 0.6821 High Jul 27
- RES 1: 0.6630/6703 High Aug 2 / 50-day EMA
- PRICE: 0.6592 @ 15:47 BST Aug 4
- SUP 1: 0.6514 Low Aug 3
- SUP 2: 0.6485 Low Jun 1
- SUP 3: 0.6458 Low May 31 and a bear trigger
- SUP 4: 0.6403 76.4% retracement of the Oct 13 ‘22 - Feb 2 bull leg
AUDUSD bears remain in the driver’s seat despite a Friday bounce. The pair is trading closer to this week’s lows. Price has recently breached both the 20- and 50-day EMAs, reinforcing current conditions. Wednesday’s move lower resulted in a break of support at 0.6596, the Jun 29 low, as well as 0.6562, 76.4% of the Oct 13 ‘22 - Feb 2 bull leg. This opens 0.6458, the May 31 low and bear trigger. Initial firm resistance is seen at 0.6703, the 50-day EMA.
