Poland's Central Bank Still Expected To Stand Pat At Least Until March

Below summarises sell-side views released in the interim between the NBP's decision to keep interest rates unchanged and Governor Adam Glapinski's press conference scheduled for 14:00GMT/15:00CET.

• Alior Bank note that today's press conference will likely be "one of the most boring ones in the past few months", with the Governor set to reiterate his main arguments from November. However, they see several factors that could tilt his rhetoric in the dovish direction, such as rising rate-cut bets across the DM space, PLN appreciation and a positive surprise in core inflation.
• Bank Pocztowy rate cuts are unlikely at least until the March meeting, which may bring some decisions on the future direction of monetary policy. They suggest that we may have to wait for cuts until 2025.
  
• Goldman Sachs say that the "statement reiterated the hawkish pivot made at last month's meeting". They expect the NBP to restart its easing cycle in 1Q2024, with the release of March projection providing a key turning point.
  
• ING think that the NBP will most likely stand pat on rates in 2024, while the first discussions on the levels of interest rates may take place in March. They see a risk of stronger zloty appreciation and an earlier return to the inflation target, which would entail earlier cuts.
• JP Morgan note that the "statement is practically a carbon copy from October" but "there is high uncertainty about the fiscal and regulatory policy", with no forward guidance.
  
• mBank point to a widely expected on-hold decision and suggest that it will "get more interesting later," with the market pricing rate cuts in 2H2024. They believe that rates will remain unchanged through the entire 2024 amid sufficient economic recovery.
• Pekao write that the MPC is waiting for more clarity on fiscal and regulatory policies. They expect the NBP to keep rates unchanged at least until March, when this uncertainty will be lower.
  
• Santander expect a familiar tone at today's press conference, with monetary easing delivered so far and uncertainty around the incoming government's policy limiting room for further cuts. They believe that the Governor will spend considerable time pushing back against the proposal to put him on trial. For now, they assume that the pause in rate cuts could last until 4Q2024.