Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Executive Summary:
- The NBP is likely to maintain the pace of its tightening cycle and hike the policy rate by 100bps on May 5th following the ‘positive’ surprise in inflation in April.
- Inflation ‘return to target’ has been delayed by at least 6 months (to end 2023) according to policymakers, which therefore has levitated the market expectation of the NBP terminal rate.
- The PLN weakness combined with the global risk off environment in the past month has led to a significant surge in implied volatility in Polish risky assets, with the WIG20 index trading nearly 30% below its October 2021 high.
Link to full publication:
MNI Poland CB Preview May 8.pdf
The National Bank of Poland (NBP) is likely to maintain the pace of its tightening cycle and hike the policy rate by 100bps on April 5th following the ‘positive’ surprise in inflation in April. This move will increase the policy rate to 5.5%, its highest level since November 2008.
Inflationary pressure continues to remain elevated in the CEE region, with CPI coming out above expectations in April at 12.3% YoY (vs. 11.4% exp.), up from 11% the previous month, mainly driven by the surge in energy and food prices following the Ukraine war shock. Inflation forecasts have constantly been revised to the upside in recent months, with analysts expecting inflation to continue running at a double-digit pace in the coming months. PM Morawiecki recently mentioned that the spike in prices in Poland (and CEE region) was almost entirely driven by the Ukraine war. NBP Governor Glapinski said that the central bank estimated that the direct effects of the war contributed to 2.4ppt of the index.
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.