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Forward Rates On The Rise Again Following July CPI Print

POLAND
  • This morning, CPI inflation surprised positively in July and came in higher than expected at 5% YoY (vs. 4.7% exp.), up from 4.4% the previous month.
  • As a result, forward rates have been rising as traders anticipate that NBP policymakers will become increasingly 'hawkish' in the coming months.
  • FRA 6Mx9M has surged by over 20bps in the past two weeks and is currently trading 42bps above the Wibor 3M, implying that the market is currently pricing in one to two '25bps hikes' by the end of the year.
  • PLN has been appreciating in the past few days as higher than expected inflation print could imply sooner rate hikes from the NBP.
  • USDPLN is currently trading slightly below 3.84, next support to watch on the downside stands at 3.80 (100DMA), followed by 3.77 (200DMA).

Source: Bloomberg/MNI

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