PLN: Zloty Ticks Higher, Market Participants Mull Energy Price Outlook
Sep-25 08:27
EUR/PLN trades at 4.2615, 47 pips worse off, with bears targeting May 15 low of 4.2230, while bulls look for a rebound towards Apr 16/Dec 25 highs of 4.3102/4.3114. In the grand scheme of things, the pair remains locked in a sideways trend.
- The outlook for energy prices and its implications for monetary policy has taken centre stage again:
- From a short-term perspective, President Nawrocki's chief aide said that the head of state will 'certainly take a decision to make sure that Poles do not have to pay high bills'. This was in reference to legislation extending household electricity price caps awaiting Nawrocki's signature.
- From a long-term perspective, NBP Deputy Governor Kightley warned that the implementation of the EU's ETS2 system would be a significant upside risk to the inflation outlook for 2027 and beyond. The system is still subject to political negotiations, with Poland becoming one of the major member states contesting the proposed measures.
- The Finance Ministry paused works on legislation facilitating the planned merger of the country's largest insurer PZU and Bank Pekao, citing the need to refine and clarify technical details before submitting it to the Cabinet.
- POLGB yields crept higher at the open, then pared these moves to last sit marginally above neutral levels.
- The broad-based WIG Index has shed 0.6%; blue-chip WIG20 is 0.5% softer.
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FED: Summary Of Latest Trump-Cook Developments
Aug-26 08:23
A quick summary of the latest developments in President Trump’s challenge to Fed independence, in case missed late yesterday/overnight:
- Trump published a letter to Fed Governor Cook (in a permanent voting role through 2038) on Truth Social noting that “you are hereby removed from your position on the Board of Governors of the Federal Reserve, effective immediately”.
- It follows and is based on prior accusations of mortgage fraud from FHFA’s Pulte, with Trump having first urged Cook to resign before threatening to fire her if she didn’t do so last week.
- Gov. Cook has since said Trump has no authority to fire her and she won’t quit, doubling down on her position having pushed back on threats last week.
- From a statement released by Cook’s attorney: “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so. I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.”
- Re-upping the MNI exclusive from April 21 with Lev Menand an ex-senior Treasury adviser who specializes in legal matters around central banking at Columbia Law School. He told MNI that Governors Lisa Cook, Michael Barr and Vice Chair Philip Jefferson, all appointed by former President Joe Biden, could be on the chopping block if Trump has his way. “The officials at most risk are the recently-appointed Biden appointed officials associated with bank regulatory policy.”
- Discussing an at-the-time pending ruling before the Supreme Court related to Trump’s firing of directors of other independent agencies but nevertheless still useful context, he added that if the President were to prevail, get this emergency stay and then say, ‘You know what, I'm just going to fire some Fed governors because they'll be out of a job for months,' the lower court can't put them back in during their litigation. See MNI INTERVIEW: Fed Independence Facing Imminent Risk – Menand (Apr 21).
EURIBOR OPTIONS: Downside Put Spread
Aug-26 08:12
ERH6 98.06/97.93ps 1x2, bought the 1 for 3.5 in 10k.
EQUITY OPTIONS: EU Bank Put seller
Aug-26 08:12
SX7E (20/03/26) 215p, sold at 10.70 in 10k vs 3.4k at 229.10.
