PLN: Zloty Loses Ground
EUR/PLN deals +45 pips at 4.1909 and a move through the nearest round figure/Mar 19 high of 4.2000/4.2063 would suggest that bulls can take aim at 4.2379, which capped gains on Feb 4. Meanwhile, bears look for losses towards Feb 27 cycle low of 4.1272.
- The WIG Index sits 0.5% below neutral levels, with the WIG20 Index last seen 0.2% worse off. Business Insider reported that the Finance Ministry is moving closer towards finalising a reform of the capital gains tax, with the aim of incentivising household to reallocate some of their savings parked in current accounts towards capital market instruments.
- POLGB yields have rebounded from earlier lows. The Finance Ministry will today offer for sale PLN6bn-10bn worth of PLN-denominated debt, an increase from PLN5bn-10bn pencilled in the preliminary schedule.
- NBP's Dabrowski yesterday told Bloomberg that he sees a 50/50 chance of a rate cut this year, but a move in July is possible, if "the rate of decline in inflation is faster than we currently assume, and the inflation rate does not pick up in 2027."
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STIR: A Little Over 55bp Of BoE Cuts Priced Through Dec, Risk-Off Move Dominates
The tariff-driven risk-off move has promoted modest dovish repricing in GBP STIRs.
- BoE-dated OIS now shows ~56bp of cuts through year-end vs. ~52bp late yesterday. The contract sticks comfortably within the recent range, with current levels printed as recently as last Tuesday.
- Further forwards, the strip moves back towards pricing 20bp of cuts through May, with the next 25bp cut fully discounted through June.
- SONIA futures flat to +4.0, with some contracts threatening to break above last week’s highs.
- Late Monday saw BoE dove Dhingra stress the need for further rate cuts given her views surrounding ongoing consumption weakness as she warned that gradual rate cuts of 25bp per quarter would still leave policy rates in restrictive territory come the end of the year.
- This afternoon will bring comments from BoE chief economist Pill, as he delivers closing remarks at the Bank’s BEAR conference.
- A reminder that we have suggested that Friday’s address from Deputy Governor Ramsden could provide the most interesting round of BoE communique this week. See our Gilt Week Ahead for more on our thinking surrounding that matter.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Mar-25 | 4.448 | -0.7 |
May-25 | 4.257 | -19.7 |
Jun-25 | 4.185 | -27.0 |
Aug-25 | 4.046 | -40.9 |
Sep-25 | 3.996 | -45.8 |
Nov-25 | 3.918 | -53.6 |
Dec-25 | 3.892 | -56.2 |
FOREX: FX OPTION EXPIRY
Of note:
EURUSD 2.13bn at 1.0400/1.0450.
EURUSD 9.66bn at 1.0400/1.0500 (wed).
USDJPY 1.79bn at 150.00 (thu).
EURUSD 2.77bn at 1.0396/1.0400 or 1.54bn at 1.0550 (fri).
USDJPY ~1bn at 150.00 (fri).
USDCAD 1.6bn at 1.4290/1.4300 (fri).
USDCAD 1.46bn at 1.4300 (mon).
- EURUSD: 1.0390 (597mln), 1.0400 (1.04bn), 1.0415 (228mln), 1.0435 (272mln), 1.0450 (589mln), 1.0480 (220mln), 1.0500 (230mln), 1.0525 (778mln).
- USDJPY: 145.55 (291mln).
- AUDUSD: 0.6350 (301mln).
- USDCNY: 7.2500 (430mln).
US TSY FUTURES: TYM5 Blocked
Latest block trade lodged at 08:57:09 London/03:57:09 NY:
- TYM5 5K lots blocked at 110-07+, looks like a seller.
- DV01 ~$322K.
