PLN: Zloty Slips Amid CE3 Weakness, Banking Stocks Come Under Pressure
Aug-14 09:16
EUR/PLN last changes hands at 4.2611, up by 103 pips on the day, with bulls still targeting Apr 16/Dec 25 highs of 4.3102/4.3114. Conversely, downside focus falls on May 15 low of 4.2230.
- Poland's current-account balance surprised to the upside in June, flipping to a surplus of EUR651mn, despite expectations of a deficit. This was a product of relatively strong exports and lower oil prices that weighed on imports.
- Statistics Poland confirmed July inflation at +3.1% Y/Y. Headline CPI returned to the NBP's tolerance band, but services inflation remains elevated, while increases in administrative fees remain an upside risk.
- President Nawrocki and Prime Minister Tusk will discuss foreign policy after the former unexpectedly replaced the PM at a call between US President Trump and European leaders, reportedly on the White House's request.
- The WIG Index and WIG20 both sit 1.4% lower. Banking stocks (-2.0%) came under pressure as the Finance Minister said works are ongoing on a new sectoral tax.
- POLGBs firmed in early trade, before paring some gains.
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FOREX: Greenback Reversing Monday Gains Ahead of US CPI
Jul-15 09:12
- The USD index sits in moderate negative territory on Tuesday, taking the DXY back to unchanged levels on the week. Cautious sentiment precedes the June inflation report from the US, which will be the final input for the Fed and no doubt prompt some further commentary from President Trump.
- This dynamic has allowed AUD and NZD to outperform on the session, eroding the majority of the prior day’s declines. Bolstered sentiment in the equity tech space has been supportive, buoyed by early headlines that chip/AI bellwether Nvidia would resume sale of its H20 chip to China (with US government approval). Additionally, China’s Q2 GDP print was slightly better than forecast (y/y growth holding above 5%).
- The impressive USDJPY rally stalled overnight at 147.89, just 14 pips shy of the June highs of 148.03. The pair has since slipped back to unchanged on the day around 147.65. The key technical point for the pair remains at 148.65 as we approach the significant US data, the May 12 high and a reversal trigger.
- Markets remain cautious surrounding the upcoming upper house election on Sunday in Japan, with latest polls underlining the prospect that the governing bloc may struggle this weekend, with the focus remaining on the relentless rise in longer-dated JGB yields.
- GBP has been consolidating its relatively weak position this week, just below 1.3450. A UK jobs report from KPMG REC showed a particularly pessimistic/stagflationary set of figures on Monday, keeping markets on a pessimistic footing ahead of UK inflation and labour market data later this week. EURGBP reached a recovery high this morning at 0.8697, further narrowing the gap with the key bull trigger at 0.8738, the 2025 high and near-term upside target.
- Swiss Franc strength continues to be notable as CHFJPY rose to a fresh record high of 185.73 overnight. It is also worth highlighting that EURCHF dipped to a near 3-month low on Monday, slipping back below the 0.9300 mark.
GILT AUCTION RESULTS: 4.25% Jun-32 Gilt Tender
Jul-15 09:04
| 4.25% Jun-32 Gilt | |
| Amount | GBP1.00bln |
| Avg yield | 4.161% |
| Bid-to-cover | 4.42x |
| Tail | 0.3bp |
| Avg price | 100.527 |
| Low price | 100.510 |
| Pre-auction mid | 100.506 |
MNI: EUROZONE MAY IP +1.7% M/M, +3.7% Y/Y
Jul-15 09:00
- MNI: EUROZONE MAY IP +1.7% M/M, +3.7% Y/Y
