PLN: Zloty Edges Lower, Geopolitics Remains In Focus
EUR/PLN trades +36 pips at 4.2588 after a geopolitics-dominated week. Bullish focus remains on Apr 16/Dec 25 highs of 4.3102/4.3114, while bears look for a sell-off towards May 15 low of 4.2230.
- Poland shut all border crossings with Belarus due to Minsk's ongoing biennial Zapad-2025 military drill with Russia. As flagged before, around 90% of Chinese rail-borne cargo headed for Europe reaches the EU through a gateway on the Polish-Belarusian border. Foreign Minister Wang Yi will speak with his Polish counterpart on Monday. Separately, all ministries have been told to estimate potential costs before the government considers rolling out relief measures for businesses.
- Polish leaders dismissed US President Trump's suggestion that the Russian drone incursion may have been a 'mistake' and called for tougher measures against Moscow.
- The UN Security Council will convene at 10:00BST/15:00ET to discuss the drone raid. The meeting was called by the South Korean presidency on the request of Poland and other European member states.
- The NBP's Management Board agreed to Governor Glapiński's motion to increase the share of gold in foreign reserves to 30%, noting that 'the scale and pace of purchases will depend on market conditions'.
- The central bank will release July BoP data at 13:00BST/14:00CEST. According to Bloomberg consensus, current account balance may have flipped into a deficit of EUR628mn (PAP consensus: -EUR590mn).
- POLGB yields have crept higher across the curve, last sit 0.5-2.7bp above neutral levels. Stock indices have retraced initial upticks and are unchanged to marginally negative.
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COMMODITIES: WTI Futures Remain Weak After Break of Bear Trigger
WTI futures traded poorly Friday, cracking the 50-day EMA and piercing the bear trigger. This keeps S/T momentum pointed lower. The clear break exposes $58.17, the May 30 low. Gains early last week marked an extension of a corrective cycle - which may now have concluded. $69.41 marks the 50.0% retracement of the Jun 23-24 downleg - an important level. A continuation higher would open $70.96 next, the 61.8% retracement point. Gold traded lower at the start of the week, but last week's strength returned prices toward the top-end of the recent range and supports the view that short-term weakness is corrective - for now - and a bull cycle that started Jun 30 remains intact. However, the yellow metal is within close proximity to support at $3334.75, the 50-day EMA. A clear break of this level continues to signal scope for a deeper retracement and exposes the next key support at $3248.7, the Jun 30 low. Key near-term resistance is $3439.0, the Jul 23 high.
- WTI Crude down $0.61 or -0.97% at $62.56
- Natural Gas down $0 or -0.04% at $2.807
- Gold spot up $12.28 or +0.37% at $3360.53
- Copper down $0.3 or -0.07% at $458.25
- Silver up $0.58 or +1.53% at $38.507
- Platinum up $5.85 or +0.44% at $1349.45
EQUITIES: E-Mini S&P Trading at Fresh Cycle High
The bounce off post-NFP lows in global equity indices has held, with the Eurostoxx 50 future still above the 50-day EMA. Additional strength refocuses attention on 5486.00, the May 20 high. To the downside, recent impulsive weakness did result in a temporary breach of the bear trigger - this makes the April 30 hi/lo range at 5078-5138 the area of downside interest. E-mini S&P prices recovered well Friday, meaning the bulk of the bounce off the NFP low is holding firm, keeping the underlying uptrend intact. The index holds above support at the 20-day EMA, at 6371.43 and is at a fresh cycle high. Through recent phases of weakness, the 50-day EMA at 6249.46, has held as support - and will be important on any intraday declines. Clearance of this average is required to signal a stronger reversal. The primary trend remains up, leaving key short-term resistance and the bull trigger at 6468.50, the Jul 31 high.
- Japan's NIKKEI closed higher by 556.5 pts or +1.3% at 43274.67 and the TOPIX ended 25.54 pts higher or +0.83% at 3091.91.
- Elsewhere, in China the SHANGHAI closed higher by 17.547 pts or +0.48% at 3683.465 and the HANG SENG ended 643.99 pts higher or +2.58% at 25613.67.
- Across Europe, Germany's DAX trades higher by 186.73 pts or +0.78% at 24210.64, FTSE 100 higher by 14.64 pts or +0.16% at 9162.17, CAC 40 up 31.86 pts or +0.41% at 7785.39 and Euro Stoxx 50 up 42.05 pts or +0.79% at 5378.2.
- Dow Jones mini up 86 pts or +0.19% at 44644, S&P 500 mini up 11 pts or +0.17% at 6479.5, NASDAQ mini up 60.25 pts or +0.25% at 23998.
BTP: Block Trades in 2yr and 10yr
ouple of Italian 2yr and 10yr Block trades, it looks closely weighted and could be a flattener.
- BTSU5 ~2.34k sold at 107.76.
- IKU5 1k bought at 121.12.
