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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.
POLAND
- Yesterday, the NBP decided to raise its benchmark rate by 75bps to 3.5% to continue its 'fight' against inflation.
- Even though consensus was expecting a 50bps hike, a lot of the analysts' projections were made 1 week ago and therefore did not take into account the recent PLN moves.
- Although a 75bps hike has historically been perceived as significant, it was still 'light' considering recent zloty depreciation.
- FRAs were pricing in at least a 100bps hike with the 1Mx4M trading over 100bps above the Wibor 3M in the days preceding the meeting.
- At the same time, policymakers run the risk of accelerating the economic slowdown by hiking too aggressively.
- The chart below shows that the sharp flattening of the yield due to the aggressive NBP tightening has been pricing in a significant deceleration in the economic activity.
- Market was first slightly 'disappointed' by yesterday's decision, with EURPLN rising to a high of 4.9240 up from 4.88 before the meeting.
- However, the slight ‘improvement’ in the Russia/Ukraine conflict following Zelensky’s comments on NATO has been supporting CEE currencies broadly, with EURPLN falling below the 4.85 level this morning.
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.
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