PLN: Zloty Lags Behind CE3 Peers

• The third highest net increase on record.
• More to follow.

• The US Senate has passed a funding package to reopen the US government, sending it to the house which should allow for a reopening on Wednesday. The USD index has been consolidating around the 99.50 mark as details surrounding the release of US tier-one data is awaited. This left country-specific drivers in focus, with soft UK labour market data prompting GBP downside while CHF outperforms on optimism for a US-Swiss trade deal.
• A December BoE cut is now 80% and renewed downward pressure for GBPUSD looks set to snap a four-day winning streak for the pair. The bounce fell short of initial resistance at 1.3231, the 20-day EMA. Moving average indicators continue to signal a bearish trend, potentially strengthening the narrative that recent gains could be considered corrective.
• CHF outperforms following late yesterday's optimism on a potential Swiss trade deal with the US. While such a deal would be unlikely to sway SNB rates this year or the next, it should see a moderate upwards revision of 2026 GDP forecasts for the country. EURCHF sees downside pressure as a function of that at 0.9287. Key medium-term support for the pair remains at the clustered lows between 0.9206/22.
• Despite firmer consumer confidence data, AUD has reversed a touch lower this morning, eroding a small portion of the impressive gains Monday. This has allowed AUDNZD to edge lower, with the 2013 highs at 1.1586 broadly holding. Initial support for the cross moves up to 1.1513.
• Two ECB speakers as well as Norges Bank's Wolden Bache are scheduled for the rest of the day.

Little reminder that at 10:40GMT we will have the results of the ILTR. This will be the last ILTR where using Level A collateral will see a spread of flat to Bank Rate. From next week's operation the spread will increase to Bank Rate +3bp.

• This might increase usage at today's operation.
• Also with RONIA high and UK funding markets tight, this operation is very much in focus.