PLN: Zloty Shows Limited Reaction To CPI Data, POLGB Yields Sink
The zloty cut gains in reaction to below-forecast CPI data but the reaction move has been relatively limited, with EUR/PLN still trading 50 pips shy of neutral levels at 4.1801. Bearish focus is on 4.1272, a cyclical low printed on Feb 27, while bulls look for a rebound above the 50-EMA intersecting at 4.1999.
- Local FI space has shown a more pronounced reaction to CPI data, with POLGB yields sinking across the curve. When this is being typed, they sit 9.2-4.3bp lower on the day and the curve runs steeper. Polish FRAs have have retreated across the curve, with 9x12 FRA/3-month WIBOR spread last seen at just over 100bp.
- Statistics Poland revised January CPI print to +4.9% Y/Y from the flash reading of +5.3%, with inflation staying at +4.9% in February versus +5.3% expected. The surprise was driven by the annual revamp of the CPI basket, which set the starting point for 2025 lower and should affect the inflation path in the coming months.
- January & February inflation figures cast doubt on the NBP's inflation projection, which showed a peak at +5.4% Y/Y in 1Q2025. A significant acceleration in price growth would now be needed for this forecast to materialise. NBP analysts may touch upon this during their presentation of the Inflation Report set to begin at 10:00GMT/11:00CET.
- This comes after NBP Governor Glapinski deployed firmly hawkish rhetoric yesterday, but left the door ajar to rate cuts this year, should inflation undershoot the central bank's projection. Market consensus has been that the projection is based on unrealistic assumptions, which may leave some room for cuts in 2H2025.
- Two MPC members confirmed that cuts may commence this year. Ludwik Kotecki said that he expects a 25bp rate reduction in July, while Henryk Wnorowski said the odds of a July cut have decreased somewhat, but it remains on the table.
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JPY: An update on the Yen Exchange traded Option
A quick update on the Yen Exchange traded Option Yesterday, looking at the Open Interest the put seller suggest a new Position, OI has moved to ~20k vs ~8.2k Yesterday.
Recall Yesterday:
- JPYUSD (7th Mar) 65.00p, was sold at 0.03 and 0.025 in over 9k..
MNI: STARTING SOON: MNI Webcast with ECB Frank Elderson At 1000GMT
You are invited to listen to an MNI Webcast with Frank Elderson, Member of the Executive Board of the European Central Bank.
Details below:
- TOPIC OF DISCUSSION: 'Climate Change: Impact on Monetary Policy & Bank Supervision'
- DATE: Wednesday 12 February
- TIME: 10 am to 11:15 am London time / 11 am to 12:15 pm Frankfurt time
- This event is on the record and will run as a Zoom Webinar
To register please go to: MNI Webcast Registration
GREECE: Tasoulas Elected President In 4th Round Of Voting
Konstantinos Tasoulas has been elected as the next Greek President in the fourth round of voting in the country's parliament. Tasoulas hails from the same centre-right New Democracy (ND) party as PM Kyriakos Mitsotakis and since 2019 has served as President (speaker) of the Hellenic Parliament.
- The Greek presidency is a largely ceremonial role. The president serves as commander-in-chief of the armed forces and also comes to the fore during and after elections to facilitate coalition talks if no single party has won a majority. The next parliamentary election is not due until spring 2027.
- The election of Greek presidents is indirectly carried out by lawmakers in parliament. In the first and second rounds, a supermajority of 200 out of 300 members is required to elect a president. With ND holding 156 seats this was impossible, as was the 180 seat threshold required in the second round. In the fourth round, the threshold drops to a simple majority of 151.
- In the event, 160 lawmakers backed Tasoulas, with 34 supporting centre-left PASOK-KINAL candidate Tasos Giannitsis, 29 for far-left SYRIA's Louka Katseli, and 14 for the far-right Niki's Konstantinos Kyriakoy. A total of 39 abstained by voting present and 24 lawmakers were absent.
