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Most Local Desks Expect NBP To Look Through Double-Digit Inflation

NBP

The pre-NBP week draws to an end, with the market taking stock of the last macroeconomic data available ahead of the MPC meeting. Multiple local sell-side desks do not think that the failure of inflation to ease below +10% Y/Y will prevent the MPC from cutting rates next week.

  • Alior Bank expect a rate cut next week, as they believe that inflation will certainly ease to single digits in September.
  • BOS Bank see the odds of a 25bp rate cut next week at close to 50%, although their caseline scenario is for a cut in October.
  • ING see scope for 50-75bp worth of rate cuts this year, with the first one pencilled in for next week.
  • mBank think that on balance, yesterday's data support the case for a rate cut next week, as final Q2 GDP was revised lower.
  • Millennium Bank write that such a scenario cannot be ruled out and expect 50bp worth of monetary easing by the year-end.
  • Pekao think that the NBP will cut rates next week, arguing that +10.1% Y/Y was almost a single-digit reading.
  • Santander assume that the first rate cut will be delivered in October but the risk of a cut next week seems significant.
In some of the final comments from MPC members ahead of next week's meeting, Henryk Wnorowski said that it is too early to say if the first rate cut will happen in September or October, while Gabriela Maslowska said that she would support a cut next week if such a motion is tabled.
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