PLN: Zloty On Defensive, Focus On Leads From Global Markets & NBP Speak
Data-driven musings on Fed rate outlook have been an important price catalyst in the absence of major headlines in Poland, with EUR/PLN creeping higher over the past two sessions amid an uptick in the BBDXY Index. The zloty has been the second-worst performer in the EMEA space over Tuesday and Wednesday, beating only the South African rand.
- The zloty may have faced some mild additional headwinds from the latest rounds of NBP rhetoric. Ireneusz Dabrowski said that inflationary processes have been "extinguished," while Ludwik Kotecki said that inflation is no longer a significant problem for the economy. These comments support existing doubts about the credibility of Governor Glapinski's surprising hawkish pivot from December.
- The rate last deals +51 pips at 4.2664. Bulls eye the 20-EMA (4.2716) and 50-EMA (4.2849). Bears continue to look for a close below the 4.25 figure, which would be a psychologically significant development.
- POLGB yields slipped this morning but volatility has been limited. The WIG20 Index has been under light pressure and last sits 0.5% lower on the session.
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BONDS: Stabilising As Risk-Positive China-Driven Move Fades
Core global FI markets find a base as equities and crude oil tick away from session highs.
- Contained risk-positive move following China’s dovish monetary policy stance tweak starts to fade a little, as participants question how impactful it will be and have the feeling of “we’ve been here before.”
- TY, Bund & gilt futures stick within Friday’s ranges.
- Bund yields little changed across the curve.
- Gilts the outperformer at the 10-Year point, 1bp tighter vs. Bunds, while Tsys are 1bp wider vs. Bunds.
- Peripherals and OATs still 0.5-1.0bp tighter to Bunds on the risk-positive move seen this morning, although spreads are off session lows.
- We have already noted that the impact of China’s monetary policy stance tweak will need to be assessed via the data seen in the coming months.
- Chinese focus now moves to this week’s CEWC (more on that in earlier bullets).
EQUITIES: EuroStoxx Holds on to Recovery
The S&P E-Minis contract maintains a bullish tone and price is trading at its latest highs. Recent gains confirm a resumption of the uptrend and signal scope for a continuation near-term. Note that moving average studies are in a bull-mode set-up. Eurostoxx 50 futures traded higher last week and the contract is holding on to its latest gains. The move higher undermines a recent bearish theme. Price has traded through the 50-day EMA, at 4873.27.
- Japan's NIKKEI closed higher by 69.33 pts or +0.18% at 39160.5 and the TOPIX ended 7.34 pts higher or +0.27% at 2734.56.
- Elsewhere, in China the SHANGHAI closed lower by 1.542 pts or -0.05% at 3402.534 and the HANG SENG ended 548.24 pts higher or +2.76% at 20414.09.
- Across Europe, Germany's DAX trades lower by 2.71 pts or -0.01% at 20378.86, FTSE 100 higher by 25.72 pts or +0.31% at 8333.32, CAC 40 up 37.25 pts or +0.5% at 7461.32 and Euro Stoxx 50 up 10.92 pts or +0.22% at 4987.2.
- Dow Jones mini up 2 pts or +0% at 44722, S&P 500 mini down 2.25 pts or -0.04% at 6097.25, NASDAQ mini down 14.5 pts or -0.07% at 21644.75.
