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MPC Lon Expects Inflation To Remain Elevated For Some Time

POLAND
  • In an interview today with Biznes TV, NBP policymaker Eryk Lon said that he expects Polish inflation to remain elevated for some time.
  • We have seen that growing concerns over inflation risks have increased disagreements over the trajectory of ST rates in recent weeks.
  • Next inflation prints will be key for policy turn; persistence of inflation could 'push' policymakers to raise rates earlier than expected.
  • We have seen that the 2023 breakeven inflation has retraced lower in the past week, down 20bps to 3.67% but is still standing above the 3.5% NBP upper tolerance band.
  • As for Hungary, volatility in the Poland bond market eased significantly in the past week, with the 10Y yield retracing over 20bps lower after testing its 2% resistance, currently trading below the 1.80% level.

Source: Bloomberg/MNI

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