The Polish zloty got off to a good start of
the day on Thursday as the prospects of
snap elections faded after fringe groups Self
Defense and LPR agreed to talks on a last
chance 6 month deal with PiS. By noon the
EUR/PLN pair inched down by just under
0.5% and stabilized in the 3.84 area.
However, just before the end of trade the
zloty returned to pre opening levels after the
ruling conservatives indicated that they
could go for concessions in the proposed
stabilization pact in order to seal the deal
with the populists. According to Jaroslaw
Kaczynski the pact could encompas
additional legislation including a bill on the
central bank and extra welfare proposals.
Significant changes to the NBP act
(dissolving the monetary policy council for
example proposed by SO) would require the
backing of PO in parliament, which seems
out of the question at the moment. It’s also
worth mentioning, that both the slightly
better than expected industrial output figures
(see more in the fixed income part) and the
publication of the updated FinMin
convergence report passed by almost
without notice.
With the macro calendar empty today, the
market will devote all it’s attention to politics
today.
(CSOB - Investment research)