Zloty Holds Intraday Range After Polish CPI Reaffirms Dovish NBP Expectations

EUR/PLN has looked through Polish CPI data for February, which came in slightly more dovish than expected, supporting the case of the MPC majority which advocates keeping interest rates stable.

• The rate last deals at PLN4.7093, up 73 pips on the session, with intraday extremes intact after the release of CPI data. Bulls look for gains towards Feb 22 high of PLN4.7654, while bears keep an eye on Mar 1 low of PLN4.6620.
• POLGB yields have eased off highs, with the latest downtick seen after CPI figures crossed the wires, albeit with a slight delay. Local-currency bonds last trade 1.2-3.3bp cheaper across the curve, with slight steepening evident.
• Headline consumer inflation for February printed at +18.4% Y/Y, slightly below the +18.5% expected by consensus and the central bank. The reading for January was revised from +17.2% to +16.6% on the back of a re-weighting of the underlying basket of goods and services.
• The latest inflation outturn is expected to mark the peak of the cycle, with disinflation set to start manifesting in data from here. February core CPI figures will be published tomorrow, but are unlikely to affect sentiment among MPC members, with Governor Glapinski expecting core inflation to follow headline inflation with a lag.
• Separately, Glapinski said at a banking forum in Warsaw that further rate hikes seem less and less probable, reiterating his familiar stance.