PLN: Zloty Atop EMEA Scoreboard, Final Oct CPI Confirmed At +2.8% Y/Y
Nov-14 10:07
EUR/PLN has been under light pressure, with the zloty outperforming its EMEA peers. The pair last deals at 4.2270, 43 pips lower on the day. Bears look for losses toward May 15/Oct 22 lows of 4.2230/4.2227, which would represent a breakout of a multi-month trading range, while bulls target Apr 16/Dec 25 highs of 4.3102/4.3114. On first glance, there has been little in the way of local news flow to facilitate PLN appreciation.
- Poland's October CPI inflation was confirmed at +2.8% Y/Y in final reading, with immediate commentary from local sell-side desks reflecting general optimism about the outlook. Core inflation (the official reading will be published on Monday) may have eased to or slightly below +3.0% Y/Y amid a 0.2pp drop in services inflation, which is at the lowest level since November 2019.
- POLGBs have edged lower, with yields last seen up to 2.0bp higher. The 2-year/10-year spread has ticked away from recent cyclical narrows in intraday trade, but not enough to threaten the nascent pullback from multi-year wides printed in October.
- The Finance Ministry offers to buy back WZ0126, OK0426, DS0726 and PS1026 bonds and sell OK0128, WZ0930, PS0131, DS0432, DS1035 and IZ0836 bonds at today's switching auction.
- The broad-based WIG Index has shed 1%, with little in the way of domestic developments to shield local stocks from wider risk aversion. Blue-chip WIG20 operates 1.2% lower on the day.
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EU-BILL AUCTION RESULTS: 3/6/12-Month EU-Bills
Oct-15 10:07
| Type | 3-month EU-bill | 6-month EU-bill | 12-month EU-bill |
| Maturity | Jan 9, 2026 | Apr 10, 2026 | Oct 10, 2026 |
| Amount | E797mln | E807mln | E843mln |
| Target | E1.0bln | E1.0bln | E1.0bln |
| Previous | E800mln | E802mln | E1.142bln |
| Avg yield | 1.934% | 1.967% | 1.978% |
| Previous | 1.951% | 1.988% | 2.022% |
| Bid-to-cover | 2.87x | 1.72x | 1.83x |
| Previous | 1.93x | 2.81x | 2.51x |
| Previous date | Oct 01, 2025 | Oct 01, 2025 | Oct 01, 2025 |
STIR: Downside Risk To SONIA/Euribor Dec '26 Spread Remains Evident
Oct-15 10:05
The December ’26 SONIA future (SFIZ6) has extended on yesterday’s outperformance vs. Euribor (ERZ6). This leaves the SFIZ6/ERZ6 spread at the lowest level since late September (154.5bp last), ~10bp off month-to-date closing highs.
- We think the market has more room to reprice a dovish BoE outlook than a dovish ECB outlook, which points to the risk of further downside in the SFIZ6/ERZ6 spread.
- The next level of downside interest comes in at the September closing low, 153bp. A meaningful break there would expose cycle closing lows at 145bp.
- Downside risks to the spread remain evident, given the relatively shallow pricing of the BoE cutting cycle. ~10bp of easing priced through year-end, with the next cut not fully discounted until the March MPC.
- Yesterday’s data showed the UK labour market continues to slow, signalling a need for further easing. However, sticky inflation data had previously deferred the pricing of further easing and presents a risk to dovish views.
- Meanwhile, ECB rhetoric points to monetary policy being in a “good place”, suggesting the bank is nearing the end of the easing cycle.
- Markets still price greater-than-even odds of one further ECB cut in the cycle, with several Governing Council members noting the risks to inflation are skewed towards the downside.
Fig. 1: SONIA/Euribor December ’26 Futures Spread (SFIZ6/ERZ6)
Source: MNI - Market News/Bloomberg Finance L.P.
OUTLOOK: Price Signal Summary - EUROSTOXX50 Futures Trend Needle Points North
Oct-15 10:02
- In the equity space, a sharp sell-off in S&P E-Minis last Friday appears corrective - for now. The contract has found support below the 50-day EMA, currently at 6605.62, and the Oct 10 low of 6540.25 has been defined as a key short-term support. Moving average studies are in a bull-mode position, highlighting a dominant uptrend. The bull trigger is 6812.25, the Oct 9 high.
- The trend condition in EUROSTOXX 50 futures is unchanged, the direction is up and the latest pullback appears to have been a correction. A key support zone between 5553.01 - 5481.41, the area between the 20- and 50-day EMAs, remains intact. A clear break of the 50-day average would highlight a stronger reversal. On the upside, the bull trigger is 5689.00, the Oct 2 high. Clearance of this hurdle would confirm a resumption of the uptrend.
