POWER: Poland's February Climbs 12% On Week, Gap Widens Further from EMAs

Following on from Rep. Brian Fitzpatrick (R-PA) (US: GOP Moderate Signs Dem Petition As Healthcare Battle Dominates Congress), three more moderate Republicans - Mike Lawler (R-NY), Rob Bresnahan (R-PA) and Ryan Mackenzie (R-PA) - have signed House Minority Leader Hakeem Jeffries' (D-NY) discharge petition seeking a clean, three-year extension to healthcare premium subsidies under the Affordable Care Act (ACA). This circumvents House Speaker Mike Johnson (R-LA) and forces a full floor vote on the issue. 

• It is unclear whether the eventual floor vote will succeed. Lawler said before signing the petition that “I still believe a straight three-year extension is not the right policy. But I fundamentally believe doing nothing is even worse. “And to me, leadership left us with no option.” Instead, Speaker Johnson may look to re-open the issue within the House Republican conference and move forward with moderate amendments, rather than risk outright defeat to the Democrats. In any case, Johnson is set to emerge from the healthcare battle in a weakened position.
• So far, the White House has kept the healthcare issue, risking a spike in premiums for millions of Americans, at arms-length given the toxic political debate within the GOP and Congress in general on the topic. It remains to be seen whether this remains the case with the discharge petition going to the House floor. 

NOKSEK is probing the 0.9100 figure amid a brief impulse of SEK strength. This narrows the gap to key support at 0.9065, the April 9 low.

• Tomorrow’s Riksbank and Norges Bank decisions may set the tone for the cross into year end.
• On balance, we see dovish risks to the Riksbank and hawkish risks to the Norges Bank. If realised, this may help NOKSEK find a short-term bottom.
• We highlighted last week that NOKSEK has entered a key long-term support zone around 0.9000 – which may prove a solid psychological barrier to further downside heading into next year. 

Figure 1: NOKSEK Since 2022 (Source: Bloomberg Finance L.P)

OI data points to fairly low conviction trade in gilt futures between December 9-16, with OI in the contract essentially unchanged across that window.

• Over a slightly longer horizon, post-Budget OI dynamics also fail to signal high conviction net long setting in the contract despite the market deeming Chancellor Reeves’ (relatively backloaded on the tightening side) fiscal plans to be credible.
• OI in the contract has only risen by ~7K or 0.6%, in the time since the Budget.
• Price action is also unconvincing in the time since, with the contract settling ~30 ticks below pre-Budget closing levels on Tuesday (today’s CPI-driven rally takes it ~30 ticks above the same closing level).
• Cash curve considerations are slightly more constructive over that window, with the 2s10s and 5s30s curves flattening, adding by the DMO’s ongoing skew away from long end issuance.