PLN: Focus Remains On 4.20

EUR/PLN trades virtually flat at 4.2042, struggling to punch through pivotal support from 4.20. The pair has returned above its lower Bollinger band (last at 4.1927) but the RSI (last at 28.1) remains slightly beyond the threshold of oversold territory. Our technical analyst flags that a move through 4.20 would allow bears to target 4.1822, the 2.764 projection of the Nov 6 - 7 - 12 ‘24 price swing. Conversely, initial resistance is at 4.2369, the 20-EMA.

• Poland's economy grew by 2.9% Y/Y last year, compared with the +2.8% estimate. Pekao called it a "nice surprise," noting that it implies that growth accelerated to 3.2-3.5% Y/Y in 4Q24. ING provide the same estimate, commenting that "unlike in other CEE countries, Poland's 2024 GDP growth did not disappoint" and "the economy returned to recovery."
• Deputy Finance Minister Jurand Drop said that further zloty appreciation would not be desirable but the government is not planning to take any active steps to prevent it.
• POLGB curve has bull steepened, yields last sit 1.2-3.8bp lower. 10-year POLGB/Bund spread remains in a downtrend despite today's uptick.
• The WIG20 Index extends its YtD uptrend, adding a further 1.1% today and printing levels last seen at the beginning of September.